Mercedes Coming to America with $1-B US to Build and Power EV’s
Company to make plug-in vehicles, batteries at US factory
Investment in electric SUVs to create 600 jobs in Alabama
Daimler AG (OTCMKT:DDAIF) plans to spend $1-B to start production of Mercedes-Benz EVs at its Alabama factory, setting the world’s largest luxury-car maker up to crush fledgling car maker Tesla (NASDAQ:TSLA) on its home court.
The giant German automaker will build its 5th battery plant globally and create more than 600 jobs in the region, the company said recently.
The Alabama factory will assemble electric sport utility vehicles, taking on Tesla’s Model X and making Stuttgart-based Daimler the 1st European company to assemble EVs in the US.
The California-based carmaker’s Model S sedan outsold the Mercedes S-Class and BMW 7-Series last year in the US, putting pressure on the brands to defend their image as automotive innovators.
Daimler’s investment shows the carmaker’s shift to EVs (electric vehicles) is taking shape.
The German manufacturer is also in talks to expand its Denza joint venture with BYD Co. in China with additional models.
Like other automakers, Daimler is preparing for a time when sales of battery-powered vehicles finally take off.
US sales are projected to grow 4X from last year to 643,000 in Y 2021, about 4% of the US auto market, according to estimates by industry forecasters. The segment may come to account for about 30% of sales in Y 2030.
The shift is proving costly.
Daimler laid out a plan last week to cut $4.8-B from spending by Y 2025 to compensate for weaker margins from electric cars as global automakers accelerate efforts to roll out cleaner vehicles amid tightening emissions rules across the globe.
As part of a EUR 10-B Green-car rollout, Mercedes unveiled an electric hatchback early this month at the Frankfurt Auto Show.
In addition to the new EQ line of battery-powered cars, Mercedes will add electrified versions across its model range. Daimler’s Smart city-car brand will gradually stop offering models with combustion engines as of Y 2020.
Mercedes, which topped BMW as the top luxury auto brand in the US last year, started assembling vehicles in Alabama 20 years ago. The factory has since emerged as 1 of the brand’s main manufacturing hubs worldwide, with some 70% of assembled vehicles slated for export to global markets. About 3,700 employees produce the GLE, GLE Coupe and GLS SUVs at the site, which added the the C-Class sedan for the North American market in Y 2014.
|HeffX-LTN Analysis for DDAIF:||Overall||Short||Intermediate||Long|
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|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Neutral (-0.04)||Neutral (-0.21)||Neutral (0.09)||Neutral (-0.01)|
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