“Electric first”: Mercedes-Benz continues its strategy in the transformation to C02-neutral mobility: Mercedes-Benz announces strategic partnership and equity stake in battery cell manufacturer Farasis.

4 July, 20

Mercedes-Benz is taking another important step on its journey towards CO2–neutral mobility. The Stuttgart-based luxury car manufacturer has launched a far-reaching strategic partnership with the Chinese battery cell manufacturer Farasis Energy (Ganzhou) Co., Ltd., including taking an equity stake. This move represents another important milestone towards Mercedes-Benz’s “Ambition2039” CO2-neutral goal. Key elements of the agreement include the development and industrialization of highly advanced cell technologies, accompanied by ambitious goals for cost competitiveness. The technological focus is on significant increases in range through advances in energy density and the reduction of charging times. The contract will provide a secure source of supply of battery cells for Mercedes-Benz’s electrification strategy, while Farasis gains security for its planned construction of production capacity. In order to be able to meet increasing demand for German Mercedes-Benz plants in the future, Farasis is building a plant for battery cells in Bitterfeld-Wolfen; creating up to 2,000 new jobs. The East German site is designed as a CO2-neutral factory from the start.

„We are very pleased to further expand our partnership with Farasis in taking a decisive step within the implementation of our electric strategy ‘Electric first’. By strategically expanding our business relationship, we are pushing the electrification of our model portfolio ahead. With this agreement, we contribute our expertise in the field of battery cell development. At the same time, we are providing a boost for Farasis’s new plant and promoting the sustainable development of a key technology and its establishment in Germany. We share with our partner the common vision of a more sustainable world through CO2-neutral mobility“, says Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG, responsible for Daimler Group Research and Mercedes-Benz Cars COO.

Hubertus Troska, Member of the Board of Management of Daimler AG, responsible for Greater China says: “China is the world’s largest electric car market with tremendous potential for further development. We are already working with strong and trusted partners in China, not only to enhance our local footprint but also to strengthen our competitiveness worldwide. By taking a stake in a Chinese battery cell manufacturer for the first time, we will further leverage the potential of advanced technology partners in the market, enabling us to pursue our electric strategy globally. In the future, we will continue to strengthen our activities in research and development, production and purchasing in China.”

With this strategic partnership Mercedes-Benz is deepening its sustainability activities and further strengthening its existing business relationship with the battery cell supplier by taking a stake of around three percent. To this end, Daimler Greater China is investing a multi-million euro amount as part of Farasis’ IPO. This equity stake is conditional upon required regulatory approvals. It will give Daimler the option to nominate a representative for a seat on the supervisory board of the battery cell manufacturer. Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG, responsible for Daimler Group Research and Mercedes-Benz Cars COO would intend to take the seat after a period of 12 months subject to regulatory approval of voting process.

Current contracts with Farasis have been supplemented and include, in addition to technical and commercial contractual components, expanded legal and sustainability requirements. Under certain technological and commercial conditions, the supplier can join projects for the next generations of the Mercedes-Benz EQ products at an early stage. As a strategic partner, Farasis is a fixed cornerstone in the existing set of Mercedes-Benz battery cell suppliers. A balanced supplier set is the basis for access to the best possible technology and a prerequisite for competitiveness.

Mercedes-Benz continues to invest in advanced battery expertise

The intelligence of the battery lies in a highly complex overall system. It defines the characteristics of an electric vehicle in terms of power, range and charging time. Mercedes-Benz is taking a comprehensive approach across the whole battery technology chain – from research and development to series production. The cell is at the very heart of the battery and mastering its chemistry is therefore critical. The clear development goal is to significantly increase the range of future batteries through advances in energy density, to advance the production maturity of future battery technologies and, last but not least, to significantly reduce charging times. The increased efficiency of future batteries will further improve the sustainability of electric vehicles. This starts with the reduction of the use of critical materials and the CO2-neutral production of the cells, and goes through the efficiency in operation to recycling and a closed raw material cycle. Together with its partners, Mercedes-Benz is also driving the fastest possible industrialization of new technologies.

Local battery production is also an important success factor for the company’s electrification strategy and the key element in being able to flexibly and efficiently meet the global demand for electric vehicles. Within its global production network, Mercedes-Benz focuses on the production of highly efficient battery systems and the establishment of a global battery production network. In the future, it will consist of nine factories at seven locations on three continents.

Mercedes-Benz buys battery cells from various partners in the world market, to secure access to the latest technologies as well as ensure the supply to its global production network. Through in-depth know-how in the development and production of highly complex drive systems and research and development expertise in the field of cell production, Mercedes-Benz is involved with its suppliers in meeting the requisite specifications.

Sustainability as an integral part of the partnership

Mercedes-Benz and Farasis had already agreed on a sustainability partnership in the summer of 2019. The first result was the production of battery cells with electricity from renewable energies such as hydropower, wind and solar energy. For example, the next generation of EQ vehicles, including the EQS luxury sedan, will in part be equipped with CO2-neutral battery cells. Daimler Greater China’s investment in the battery cell manufacturer is actively driving forward the development of a key technology for electric mobility and its industrialization. In China, the battery cell supplier has built a plant in Zhenjiang that will be CO2-neutral. A production site in Bitterfeld-Wolfen in eastern Germany is currently being planned and will be CO2-neutral from the start. An additional plant in the U.S. will follow. This is in line with the Mercedes-Benz strategy of buying where production takes place.

Accelerating Electrification across the entire vehicle portfolio

As part of the “Electric first” strategy, Mercedes-Benz is implementing the electrification of all model variants and vehicle types. In less than 20 years, the Mercedes-Benz new car fleet will be CO2-neutral, and by 2030 the company aims to ensure that more than 50 percent of its passenger car sales are plug-in hybrids or all-electric vehicles. Fully electric Mercedes-Benz trucks, vans and buses are already in series production today. By the end of this year, the goal is to have five fully electric passenger car models and 20 plug-in hybrid variants on the market. The plug-in hybrid portfolio ranges from model variants from the A- to S-Class, from the GLA to the GLE with electric ranges of up to 100 kilometres.

The model offensive also continues with purely battery-electric vehicles. Already available are the fully electric Mercedes-Benz EQC models (EQC 400 4MATIC combined power consumption: 20.8-19.7 kWh/100 km; combined CO2 emissions: 0 g/km)[1], the smart EQ fortwo and smart EQ fourfour models, and the EQV 300 (combined power consumption: 26.4-26.3 kWh/100 km; combined CO2 emissions: 0 g/km)[2]. Purely electric variants in the compact segment, as well as the purely electric EQS for sustainable luxury in the premium segment, are also coming soon.

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