Mercedes-Benz is looking to make the skies a little bluer in sweet home Alabama.
The luxury automaker said Wednesday that it’s opening a battery plant in Bibb County as Mercedes continues the drive to an all-electric future in a bid to catch up to with Tesla (TSLA) – Get Tesla Inc Report.
‘A Next Milestone’
The company said up to 600 jobs will be created at the facility.
“We are getting ready to go all-electric!” Mercedes said on Twitter. “As a next milestone, we opened a new state-of-the-art battery plant in Bibb County, Alabama. It will provide batteries for the new EQS SUV – the first EV to roll off the production line at our nearby #MercedesBenz plant in Tuscaloosa.”
The Tuscaloosa facility has been the production plant for large SUV since 1997.
Mercedes-Benz said it will produce the EQS SUV and EQE SUV in its plant in Alabama, as part of a global push to produce all-electric vehicles at seven locations on three continents.
“We’re proud to create new, future-proof jobs to build all-electric SUVs ‘Made in the USA’ at a plant that is such an established part of our production family since 25 years,” Ola Källenius, chairman of the board of management of Mercedes-Benz Group, said in a statement.
Since the 1990s, Mercedes-Benz has invested a total of more than $7 billion in Alabama, with $1 billion going to the battery plant, the logistics centers and to upgrade the production line to make EV’s.
Like many other auto companies, Mercedes-Benz is attempted to get a piece of the market currently dominated by Tesla, the top EV company by market capitalization.
Last month, the company’s production chief Joerg Burzer said in an interview with Reuters that Mercedes expects to have factories producing exclusively EVs by the second half of the decade but will steer clear of building EV-only plants.
Mercedes will instead keep production lines flexible in line with market demand, Burzer said, adding that the carmaker foresees some of its production lines within factories switching fully to electric even sooner.
News of the Bibb County plant was generally applauded on social media.
One poster tweeted a clip of Mike Myers’ Austin Powers character saying “oh, yeah, baby.”
“A great step, but a little late,” another person tweeted. “But we wish you the best.”
Roughly 2.3% of Mercedes-Benz Cars’ sales last year were battery-electric vehicles, rising to 11% including plug-in hybrids, which have both an engine and a battery.
As of 2025, the company expects electric and hybrid electric cars to make up 50% of sales, with all-electric cars expected to account for most of that.
Meanwhile, Volkswagen said Tuesday that several of its battery-electric models, including the Porsche Taycan, are already sold out for 2022, and that high consumer demand is helping its electric-car effort become as profitable as its internal-combustion lineup more quickly than expected, CNBC reported.
Volkswagen was the leading seller of EVs in Europe last year, with about 25% of the market, and the second behind Tesla in the U.S. with roughly 7.5% share last year.
Electric vehicle makers are facing the same hurdle in the form of soaring raw material prices and supply chain delays brought on by the Covid-19 pandemic.
Prices for raw materials, such as nickel and aluminum have been surging following Russia’s invasion of Ukraine.