Daimler invests USD 1 billion in U.S. auto plant to build first electric SUV

The reputed German automaker, Daimler has announced the expansion of its manufacturing plant in the U.S., with an aim to consolidate its position in the electric vehicle market. The company plans to commence the production of a fully electric SUV at its Alabama manufacturing plant, with an initial investment of USD 1 billion. By the end of 2022, the firm plans to convert the entire Mercedes-brand lineup with totally electrified vehicles.

With this announcement, Stuttgart-based Daimler has become the first European company to assemble plug-in vehicles in U.S. This will apparently be the fifth battery plant of the German automaker, which will generate more than six hundred jobs in the region.

Analogous to its automotive contemporaries, Daimler has been planning to commence the production of battery-powered vehicles since a while now. In the month of July, the company had announced the development of a battery assembly facility in China, a move which has been forecast to have a sizeable impact on the automotive market. Statistically, by the end of 2021, Daimler would be accounting for close to 4% of overall U.S. automotive industry share.

Daimler has also declared that the production of an electric sports-utility vehicle will start from next decade at Tuscaloosa plant. The new SUV will be launched to the market under EQ electric vehicle, which is sub-brand of Mercedes-Benz. Daimler’s investment of USD 1 billion is an offering beside the USD 5.8 billion it has already invested at the Tuscaloosa plant, which in 2016, produced over 310,000 Mercedes vehicles - SUVs and entry level C-class sedans. A Daimler board member in charge of Mercedes Benz’s production and supply chain was quoted stating that nearly 70% SUVs manufactured at Alabama facility were exported to China.

Apart from Daimler, several other automotive giants have been investing in the United States. For instance, scarcely this week, Volvo Cars announced that it would double its investment in the U.S. plant based in Charleston. Also, a month ago, Mazda Motor Corp. and Toyota Motor Corp. jointly commenced the production of a plant worth USD 1.6 billion. The shifting focus of automotive biggies toward United States is likely to enhance electric automotive market size in the country.

For the record, the assembly of cooling systems and other parts for the electric powertrain system will be carried out at the Alabama new facility. However, the automaker is planning to outsource the manufacturing of lithium-ion battery cells, which will also create lucrative opportunities for other industry giants. In addition to its expansion strategies across the U.S., Daimler is also planning to build a logistic hub for distributing vehicle kits for the final assembly across Southeast Asia and Russia.

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Sunil Hebbalkar

Sunil develops content for Market Size Forecasters. A Post graduate mechanical design engineer by qualification, he worked as an intern at the defense lab for one year in the engine design and development department before switching his professional genre. Following his technical writing skills, he ...

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