JAKARTA - Mercedes-Benz Daimler plans to invest more than 40 billion euros, or about 47 billion US dollars (US) until 2030, to compete with Tesla in the electric car market.
In a statement Thursday, Mercedes and its business partners will build eight battery factories, along with plans to increase production of electric vehicles.
In addition, Mercedes said that starting in 2025, all new vehicle platforms will only be for electric vehicles.
"We really want to do it and be dominant, if not all electric, by the end of this decade," Chief Executive Ola Källenius told Reuters as quoted by Thursday 22 July, adding spending on traditional combustion engine technology would be close to zero by 2025.
However, Daimler, which will be rebranded as Mercedes-Benz as part of plans to divest its truck division later this year, has not given a tough deadline to end sales of fossil fuel cars.
Some automakers, such as Geely's Volvo Cars, have committed to fully electric vehicles by 2030. General Motors Co., meanwhile, says it aspires to the same by 2035. Both are trying to close the gap with Tesla.
"We need to move the debate away from when you build the final combustion engine, because it's irrelevant. The question is, how fast can you upgrade to near 100 percent electricity and that's what we're focused on," said Källenius.
Daimler shares rose 2.5 percent after the news, which comes more than a week after the European Union proposed an effective ban on sales of new gasoline and diesel cars starting in 2035, as part of a broad package of measures to combat global warming.
At Mercedes-Benz, the shift will see an 80 percent drop in investment into combustion engine and plug-in hybrid technology between 2019 and 2026, which it says will have a direct impact on jobs.
This refers to the fact, electric vehicles have fewer components, so the production process requires fewer workers than combustion engine vehicles.
"The transformation of our workforce will involve difficult decisions. Yes, overall we must and will reduce our personal costs," said member of the Mercedes-Benz management board and head of human resources Sabine Kohleisen.
Mercedes said it expects 50 percent of its product sales by 2025 to be electric and hybrid electric cars, and expect to make up the majority by 2030.
For 2025, Mercedes has prepared three electric car platforms, details, one for passenger cars and SUVs, one for vans and one for high-performance vehicles.
To achieve this target, Mercedes also acquired the British company YASA Limited to help develop high-performance electric motors. The company said it would build 200 gigawatt hours (GWh) of battery cell capacity.
The plan is that four of its new battery factories will be in Europe and one in the United States. Mercedes said it would soon announce a new European partner for its battery production plans.
Do not stop there, as part of the eleftrification of its products, Mercedes Benz will build a battery recycling plant in Kuppenheim, Germany, which will start operating in 2023.
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