Construction Begins On Huge Battery Factory For Upcoming Mercedes-Benz EQ

OCT 25 2016 BY MARK KANE 46

Daimler subsidiary ACCUMOTIVE is starting construction of its second battery pack factory in Kamenz, Germany.

An investment of about €500 million will enable a fourfold increase of production, and also expands the facility’s logistics area up to around 80,000 m2.

Mercedes-Benz Generation EQ

Mercedes-Benz Generation EQ

According to the company, the €500 million is only about half of some €1 billion that Daimler intends to spend on the global battery production compound.

Batteries from ACCUMOTIVE will be used throughout Daimler’s lineup – including in all the hybrid, plug-in hybrid and all-electric models from Mercedes-Benz and smart, as well as in energy storage systems.

Production is expected to begin from mid-2018.

More about the project:

“Stuttgart/Kamenz – Daimler starts the construction phase for a second battery factory at their subsidiary ACCUMOTIVE’s site in Kamenz, taking a further consequent step towards electromobility.

With an investment of about 500 million euros, the site in Kamenz will be one of the biggest and most modern battery factories in Europe. For the official groundbreaking, Prof. Dr. Thomas Weber (Member of the Board of Management of Daimler AG, Group Research & Mercedes-Benz Cars Development), Markus Schäfer (Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain Management) and Frank Blome (CEO Deutsche ACCUMOTIVE GmbH & Co. KG) met with Stanislaw Tillich (Minister President of the Free State of Saxony and President of the German Bundesrat) and other representatives from politics and economy.

Frank Blome (CEO Deutsche ACCUMOTIVE GmbH & Co. KG), Markus Schäfer (Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain Management), Dr. Thomas Weber (Member of the Board of Management of Daimler AG, Group Research & Mercedes-Benz Cars Development) and Stanislaw Tillich (Minister President of the Free State of Saxony and President of the German Bundesrat) in the battery production of ACCUMOTIVE;

Frank Blome (CEO Deutsche ACCUMOTIVE GmbH & Co. KG), Markus Schäfer (Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain Management), Dr. Thomas Weber (Member of the Board of Management of Daimler AG, Group Research & Mercedes-Benz Cars Development) and Stanislaw Tillich (Minister President of the Free State of Saxony and President of the German Bundesrat) in the battery production of ACCUMOTIVE;

“By 2025, our passenger car product portfolio will contain more than ten fully electric vehicles. At the same time, we are continuously pushing our plug-in-hybrid offensive and the introduction of 48-volt-systems.

Highly efficient battery systems are an important aspect of our strategy. They are an integral part of the vehicle architecture and not a ready-made product. The development, production and integration of those complex systems into our vehicles is one of our core competences”, stated Weber.

Today, the company already has a variety of electrified vehicles on the market and the product portfolio is set to grow continuously.

At “Mondial de l’Automobile 2016” in Paris, Mercedes-Benz presented its new product brand for electromobility, EQ. It offers a comprehensive electromobile ecosystem consisting of products, services, technologies and innovations. Forerunner of the new brand is the “EQ”-Showcar that celebrated its world premiere in Paris. Series production of the EQ with a range of up to 500 kilometers will start within this decade in the SUV segment. A model offensive will follow subsequently, complementing the portfolio of Mercedes-Benz Cars with electrified models. ACCUMOTIVE will deliver the batteries for the first EQ production model.

Mercedes-Benz Generation EQ

Mercedes-Benz Generation EQ

Minister President Tillich emphasized: “The investment is a strong sign of trust in the Saxon location here in the Upper Lausatia. This brings us a great deal closer to our goal of getting the traditional Saxon automotive industry ready for the era of electromobility. Electromobility or stationary energy storage – both segments have a great potential for the future.” He also referred to the already existing competence in the Free State, since the battery research alliance of the Fraunhofer society contains four institutes from Saxony.

Daimler invests an overall amount of one billion euros into the global production of battery systems. “We are building a global production compound for lithium-ion batteries. Kamenz will become the competence center of this compound. With the new battery factory, the flexible and efficient production network of Mercedes-Benz Cars deepens crucial know-how for the production of promising future technologies. This also strengthens our global competitiveness and puts us in a very good position concerning future mobility”, said Schäfer.

Daimler starts the construction phase for a second battery factory at their subsidiary ACCUMOTIVE’s site in Kamenz. Roland Dantz (Mayor of Kamenz) Frank Blome (CEO Deutsche ACCUMOTIVE GmbH & Co. KG), Prof. Dr. Thomas Weber (Member of the Board of Management of Daimler AG, Group Research & Mercedes-Benz Cars Development), Stanislaw Tillich (Minister President of the Free State of Saxony and President of the German Bundesrat), Markus Schäfer (Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain Management) and Michael Harig (District Administrator of Bautzen) met for the official groundbreaking ceremony.;

Daimler starts the construction phase for a second battery factory at their subsidiary ACCUMOTIVE’s site in Kamenz. Roland Dantz (Mayor of Kamenz) Frank Blome (CEO Deutsche ACCUMOTIVE GmbH & Co. KG), Prof. Dr. Thomas Weber (Member of the Board of Management of Daimler AG, Group Research & Mercedes-Benz Cars Development), Stanislaw Tillich (Minister President of the Free State of Saxony and President of the German Bundesrat), Markus Schäfer (Member of the Divisional Board of Mercedes-Benz Cars, Production and Supply Chain Management) and Michael Harig (District Administrator of Bautzen) met for the official groundbreaking ceremony.;

The new production facility is planned to start operations in the middle of 2018. The area of about 20 hectares is located in immediate proximity of the existing battery factory in Kamenz, about 50 kilometers from Dresden. With the construction of the second facility, the production and logistics area will be quadrupled to about 80,000 square meters.

ACCUMOTIVE will gradually increase the number of employees in the coming years. The workforce will double by the end of this decade. “Already in 2012, we started the battery production for vehicles of the brands Mercedes-Benz and smart in Kamenz. For about a year now, we have additionally been producing stationary energy storages. Thanks to the know-how and motivation of our employees we have qualified for a further development step, becoming the competence center for worldwide battery production”, said Blome, who will be responsible for the global battery production compound. “In our new factory in Kamenz, we pursue a holistic approach starting sustainability already in our production processes.”

The new plant will be constructed as a CO2-neutral factory. Production facilities will be powered by a cogeneration unit and a photovoltaic system combined with stationary energy storage systems. Solar modules with the surface of two football fields will be installed on the rooftop of the new production building. This equals a capacity of 2 megawatts. The new battery factory will also be benchmark for Industry 4.0 with most modern facilities and technologies.

In the future, Kamenz will produce lithium-ion batteries for all electrified vehicles of Mercedes-Benz and smart – including plug-in hybrids as well as fully electric vehicles. On top of that, Kamenz will produce batteries for stationary Mercedes-Benz energy storage units as well as 48-volt-systems. The 48-volt-system will gradually be integrated into different model ranges.”

Categories: Mercedes

Tags: , ,

Leave a Reply

46 Comments on "Construction Begins On Huge Battery Factory For Upcoming Mercedes-Benz EQ"

newest oldest most voted

EVs are creating new jobs in new industries!

First BYD. Then Nissan. Then Tesla. Now Mercedes-Benz.

So when are the other auto makers going to start building their own battery factories, so they can control their own battery supply for their long-distance PEVs (Plug-in EVs)? I’m looking at you, GM!

I don’t think that it is necessary. GM can control their battery supply like they are currently with supply contracts. They have the largest test lab in the US and constantly evaluate different technologies. Why pigeonhole yourself with just 1. Supply contracts allows them to be flexible, going with the best technology, and making the suppliers compete for their business.

“GM can control their battery supply like they are currently with supply contracts.” Didn’t work for Nissan. Didn’t work for Tesla. Nissan’s original plan was to supply all the batteries for the Leaf from the one battery producer in Japan. But as things developed, Nissan had to build two new battery factories specifically to supply the Leaf; one in Tennessee and the other in the UK. Tesla is doing the same, with the Gigafactory. Do you think GM has some special magic that can let them ignore the reality that depending on an outside supplier for batteries means they can’t control their own production rate? Honestly, I find it puzzling that this fundamental economic reality is so hard for people to accept. Would GM farm out the manufacture of its gas engines to an outside supplier? Of course not! GM has its own factories which specialize in that. Batteries in a BEV are just as important to making the car as gas motors are to gasmobiles. Why do so many people claim that somehow the economic reality will be different for EVs than for gasmobiles? I really don’t get it. It’s common sense. No specialized knowledge of the auto industry… Read more »

Tesla is partnering w/Panasonic, so the supplier is still involved. Renault (Nissan partner) receives batteries from LG chem, I wouldn’t be surprised if Nissan eventually goes that route as well.

GM, as well as most other automakers, have suppliers for many/most of their parts. The battery cell is just another part. You mentioned engines. I’ve worked in 2 plants (non-GM) that make the engine blocks and several other parts of the engine for GM (and others). It’s just another part. There’s nothing “magical” as you say.

And Nissan teamed with Japanese electronics maker NEC to form AESC, which makes batteries for Nissan, just as Tesla has teamed with Panasonic.

I think you’re missing the point here, Kdawg. The point is that every maker of long-range PEVs (Plug-in EVs) will need to own their own battery factories, so they can control their own supply; control the rate of production of battery cells and battery packs. That doesn’t at all mean auto makers don’t need to partner with an actual battery manufacturer, who will supply the IP (Intellectual Property) and the expertise.

Despite Tesla begging, cajoling, and even trying to strong-arm Panasonic, there has been over the past several years a chronic shortage in how many battery cells Tesla could get from Panasonic. One of the reasons, possibly the main reason, that Tesla is spending billions of dollars to build the Gigafactory, is so they can control their own rate of production, rather than being dependent on Panasonic.

You think it will be different with GM and LG Chem? Well, let’s wait and see. I predict that within five years, GM will move to build its own large battery factory or factories, for reasons I’ve given above.

So you don’t think GM would outsource an engine, why not? They outsource entire vehicles, look at the Chevrolet City Express built for them by Nissan.

I’m sure you can find examples of most or all major auto makers outsourcing the engines of a few of their secondary models. I think there have even been cases where auto makers shared engines between them.

But not one of them outsource the supply for the gas engines for their best selling models. Exceptions to a rule don’t mean a rule is invalid; it only means there are some exceptions.

The Chevrolet City Express? Never heard of it. Googling a bit, I see it’s a rather odd-looking full-sized van. I’m guessing that the model doesn’t sell that many per year.

First to be second, that was the Panasonic way. No need to spend lots of capital when you can partner with LG for a new factory when demand increases.

From many experiences, when you sole source to yourself, you tend to be your worst supplier.
Then you’re locked in and when a better/less expensive technology comes along, you’re stuck.

There is an argument to be made there, yes. A reasonable case to be made on both sides of this issue, I think. I’m comparing batteries in a BEV to gas motors in a gasmobile, but arguably that’s not a good analogy, because the technology of making gas motors is mature, while making batteries is a tech that’s evolving relatively rapidly. One real-world example is the internal debate inside Nissan over whether to continue making their own batteries for the Leaf, or start buying them from LG Chem. Last I saw, they had compromised by shuttering their UK battery factory, but — apparently — upgraded the Tennessee battery factory to make a different type of batteries, possibly tech licensed from LG Chem, and also buying some batteries directly from LG Chem. Still, I think the general trend is quite clear. Tesla is building the Gigafactory; the article above shows Mercedes-Benz moving in the same direction. Other recent articles show that other major auto makers are seriously considering the same; see links below. I think GM’s refusal to do so indicates a lack of commitment on their part. I think it indicates they have no intention of significantly ramping up production… Read more »

I see it happening differently. I see GM (and other companies) demanding x amount of batteries by year y. Contracts will be drawn, money will be invested, and LG Chem (if they are the contractor) will expand their plants to facilitate the needs.

LG makes Bolt batteries. Panasonic makes Model 3 batteries. There’s really not much difference here, except Tesla owns the land and the building shell.

If GM owns the factory they have to use UAW/IBEW labor. Do you really think that would help the Bolt succeed?

Doggydogworld said:

“LG makes Bolt batteries. Panasonic makes Model 3 batteries. There’s really not much difference here, except Tesla owns the land and the building shell.”

You missed the point, just like Kdawg. The difference is that with the Gigafactory, Tesla — not Panasonic — will control the rate of production. GM can’t do the same, so long as it’s dependent on LG Chem for the battery cell supply.

GM controls the production rate at LG Chem with legally binding contracts. If other issues, such as a natural disaster, cause delays in cell production, these same issues would exist whether GM owned the plant or not.

Rate of production is based on investment in equipment and the buyer paying for the product. Panasonic owns the equipment, hires the people to run it and sells the output to Tesla. The amount of equipment installed, rate of production, price of the cells, etc. are all governed by the contract. It’s the same with GM/LG.

You’ve convinced yourself there’s some night-and-day difference in the structure of these two deals. It’s just not true.

What do you mean by now Mercedes-Benz?

They are not going to start manufacturing their own battery cells. In fact they recently gave up on making their own cells. This is just their second battery PACK assembly plant, but they will continue to buy the cells from their Korean battery pouch cell supplier SK Innovation.

Mercedes-Benz Turns To SK Innovations As Lithium-Ion Battery Supplier For Future Plug-In Cars:
http://insideevs.com/mercedes-benz-turns-to-sk-innovations-as-lithium-ion-battery-supplier-for-future-plug-in-cars/

Well, perhaps the InsideEVs writer who wrote the article thinks that factory will only produce battery packs, and not cells.

The actual quotes from MB seem to indicate otherwise. For example: “We are building a global production compound for lithium-ion batteries.”

I guess we’ll have to wait for more comprehensive coverage to see who is right here.

Peter is right, this is a pack-only factory (this has been gone into detail much more in the automotive & German press).
Cell production in Germany would simply be too expensive.

Now Merc? Nope. This is their SECOND battery factory. Same for VW, btw.

But I have to say Daimler investing less than 20% of what startup Tesla is investing in battery making ought to be described as farting in space. And as Douglas Adams wrote, you may think it’s a long way down to the grocery store, but that’s just peanuts to space!

Germany has huge volumes of homes with home solar systems on them. The way they keep changing the feed in bills from the power company. If a large volume of people start buying home solar storage systems. They could in theory buy up all the future battery capacity of this factory in Germany.

Lol, just last year MB was shuttering the Kamenz plant, and in February Zetsche said MB wasn’t going to invest in battery cell production, citing overcapacity in the industry. My how quickly things have changed. Or was all that just MB blowing diesel smoke?

Read the article again.

MB now BUYS the cells from third-party suppliers (= SK Innovation at the moment afaik), then assembles MODULES and PACKS.

Yes, MB has closed down cell production in Germany.

@tftf
Good point. Just re read the article and I can’t see where they say they are making cells– just packs. However, It doesn’t say they are NOT making cells either.

Anyone know the answer? IS MB going to make their own cells in this plant or just assemble packs?

I think tftf might be right. Looks like the Li-Tec cell manufacturing plant closed, and became a research facility, while most of the workers moved over to Accumotive to make packs using third party cells. The article doesn’t say, but it would make sense if the new plant were to also only manufacture packs using cells sourced elsewhere.

Mercedes purchased Li-Tec Battery GmbH, three years ago, and I believe they are using their cells in the latest Smart car.

LG Electronics tried to buy them for about a billion dollars, and that’s why Mercedes Benz probably took complete ownership of Li-Tec.

http://insideevs.com/daimler-becomes-sole-owner-evonik-li-tec-buys-deutsche-accumotives-stake/

We clearly have Tesla to thank for MB’s latest moves, as the Model S is very much eating into MB market share for luxury vehicles.

That’s the thing about disruptive tech revolutions; they really are disruptive of the affected industry.

I think the ~400,000 paid reservations for the Tesla Model ≡ really has shaken up the industry. The EV revolution hasn’t really been economically disruptive to the auto industry… yet. But things seem to be accelerating.

The handwriting has been on the wall for some years now; gasmobiles will become obsolete over the next human generation or so. For some years now, the realistic question hasn’t been if that’s going to happen, but merely how soon.

With the arrival of the Bolt EV, a $30k after tax breaks vehicle, I’d say gasmobiles are obsolete today, for the most part.

Just need to continue to reduce costs and offer more flavors.

That’s a little premature, IMHO. Compare the Model S to similarly priced luxury sedans and you get pluses (quicker, sexier, newer, unique bells and whistles) and minuses (less interior space and plushness, less trip-capable, less discounting). Same with Model 3 vs. BMW 3 series, etc.

What $37.5k (or even $30k) car do I use as a Bolt comp? Lexus CT200h???? Does the Bolt win any category?

The Bolt is not a mass market car. It’s targeted to EV enthusiasts and Lyft/Uber drivers. Both are niche markets.

As a niche car the Bolt doesn’t cannibalize any of GM’s existing mass market cars. That’s how it was able to get approved for production.

I’m not even sure what you are trying to say, but when talking about making things obsolete, I’m talking about their function. In the case of a car, it’s getting people from A to B. I don’t care if the seats have *Corinthian* leather, or it goes 0-60 in 1.2 seconds. We’re talking about people moves w/some utility. If you want more/less room, that’s why I said more flavors are needed. I also touched on the cost.

By that logic everybody would be driving a Nissan Versa.

They don’t….

But a Versa does not obsolete anything, it’s the same tech. And just because a technology is obsolete doesn’t mean everyone stops uses it. For example, CRT TVs were obsolete as soon as LCD TVs came out, but you still see CRT TVs in use today.

I don’t agree with either of you. The Bolt doesn’t suddenly make every gasmobile on the road obsolete. Nor is the Bolt just a “niche market” car. I predict the Bolt could be every bit as mainstream a car as the Tesla Model ≡. If it doesn’t sell as many, that will only be because GM doesn’t want it to bite too deeply into its gasmobile sales, and therefore GM won’t ramp up production to meet demand.

I predict the Bolt’s sales won’t be limited by market demand, as Volt sales are.

I also think it’ll be supply constrained for a while, but not because GM wants to hold back. If demand is high they’ll try their best to satisfy it and undermine Model 3 – even if they are quite different offerings. But battery supply likely can’t be ramped up very quickly, and that is the limiting factor.

Over in Europe, the Ampera-e has huge mainstream potential if the price is sufficiently aggressive. It’s not small compared to the best sellers, but it is considerably more expensive.

I’m not talking about sales, I’m talking about the technology; and the technology reaching prices where average joe’s can afford it.

I don’t think so, I think what has changed for MB is that with the Tesla Model S blowing up the sales of their bread and butter luxury ICE MB S class and the 400,000 Tesla Model 3 reservations will likewise decimate their mid-range sales Dieter and MB are wising up hopefully.

I call this the “Tesla Effect” and it will spread to all the laggard OEMs when Tesla’s Model 3 and follow on Model Y is selling in the hundreds of thousands a year.

Until VW does the same thing, their predictions of a future EV portfolio are just words.

80000 m2 is a bit less than half the size of the Gigafactory, so that seems to be serious business this time. That’s good for electrics. I doubt they would build such a factory and not build the ev that go along with it.

Install more electric charging startions in an around these battery factories. Electric cars are very
good for a country like Germany which has many wind turbines producing power at night.

Any idea as what is the latest cost of battery / KWh. Bloomberg article earlier put a graph that showed the battery price around $230 / KWh.

They closed the doors from Li-Tec (battery factory) in Kamenz about an year ago.
Now building new battery factory in Kamenz?

That’s visionary action Mercedes. And if the 4th quater profits are down again, then we will have another anouncement:

– Mercedes drops plan to build batteries in Kamenz!

That’s not at all unbelievable, if MB sees the old plant as obsolete and not worth upgrading. There’s also the question of where the factories are located. One location may be far more economically favorable than the other, for various reasons: Local cost of labor, access to transportation, currency exchange rates between countries.

Note Nissan’s reaction to LG Chem producing significantly lower cost li-ion cells: They first shuttered their battery factories in the UK and Tennessee, while they had a long internal debate over whether to upgrade those factories or start buying cells from LG Chem. The result seems to be that they decided to upgrade and reopen the Tennessee plant, but leave the UK plant shuttered in favor of buying some cells directly from LG Chem.

There are a lot of factors that auto makers have to consider, when moving towards production of long range PEVs (Plug-in EVs). As I’ve said, disruptive tech revolutions really are disruptive of the affected market. Things are not going to settle out for decades.

Some history to straighten the fact. The Accumotive plant in Kamenz was established as a battery assembly plant in 2010 (or around that time), and has been in operation ever since, never been closed. The original purpose was to take the cells from the cell manufacturer Litec (conveniently right across the street) and assemble them into battery packs. LiTec was first a Start-up (established in the remains of a facility built with a lot of government subsidies by a company called Ionity, which wanted to take on the cell phone battery manufacteres in Asia, but went bankrupt in the early 2000s, never having reached mass production), then bought by Evonik, then partially owned by both Evonik and new partner Daimler (before Accumotive was established there) and then finally acquired by Daimler when Evonik pulled out. The cells of LiTec were used in the Smart ED Gen 2 in Europe, but were not really cost competitive any more due to the unexpected drop in cost per kWh. The plant never reached full capacity either (original announcment was of cells for 150000 EV batteries per year) and thus fixed cost was certainly high. Remember, in 7 years ago EV cells were at… Read more »

7 years ago EV cells were at >1000$/kwh, predicted to drop to ~400 $/kWh by 2020.
Lets hope their prediction works better this time, otherwise history will repeat itsself.

Production starts mid 2018, so battery packs from Akkumotive will hit the road with consumers inside at 2020?

11 million US cars per year
30% EVs by 2030
equals 3 million or so EVs per year by 2030.
500,000 EVs per Gigafactory.
6 Gigafactories needed in 13 years
3 years to build each Gigafactory
= Better get busy

The fact that this is a pack factory only is siginficant and gets sidelines, and makes it a lot less significant that the gigafactory, scale aside.
Unfortunately, labor costs in Western Europe are such that cell factories are unlikely there in the near future.