Mercedes to Invest Billions in Plant Modernization Across Countries as Part of EV Transition

Mercedes plans to invest billions in modernizing plants in China, Germany, and Hungary to support their shift towards electric vehicles, according to Automobilwoche magazine.

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According to a report by Automobilwoche magazine, Mercedes (MBGn.DE) is set to invest billions of dollars in the modernization of its plants across China, Germany, and Hungary in the coming years. This move is aimed at supporting the automaker's transition towards electric vehicles and reducing emissions.

To reduce CO2 emissions, the European Union aims to decrease emissions per passenger car by 50% by the end of the decade as compared to 2020. Furthermore, the EU is currently negotiating to establish a deadline of 2035 to end the sales of fossil fuel-powered cars.

As per Mercedes' statement, the company will be prepared to transition to electric vehicles by the end of the decade, provided that market conditions are favorable.

Mercedes investing heavily in electric transition

The production manager, Joerg Burzer, has stated that Mercedes is investing a three-digit million amount per plant to prepare for the transition to electric vehicles. The investments will take place in the Beijing, Rastatt, and Kecskemet plants located in China, Germany, and Hungary respectively, as quoted by the magazine.

As per the carmaker's plan, work on the Rastatt plant will commence in the upcoming months and the production of the first model of the compact vehicle platform MMA is scheduled to begin in 2024. The production manager, Burzer, also mentioned that the number of models manufactured at the plant will be reduced from seven to four.

Mercedes investing in eco-friendly painting

Apart from the plant modernization mentioned earlier, Mercedes is also set to invest a low single-digit billion dollar amount in upgrading the painting systems at its plants in Sindelfingen, Bremen, and Rastatt located in Germany.

According to the report, the objective behind modernizing the painting systems is to reduce the consumption of water and energy, and to shift away from using gas in the painting process to adopting carbon-free energy alternatives.

Mercedes considers expansion at Tuscaloosa plant

As per Automobilwoche magazine, Mercedes is contemplating expanding its Tuscaloosa plant in the United States, which would make them eligible for the government subsidies under the recently enacted Inflation Reduction Act.

According to Burzer, Mercedes is fully prepared to adapt to any additional modifications in the regulatory environment.

"The framework conditions worldwide change again and again, we may have to react to that," Burzer said.