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Mercedes-Benz invests ~$600 million to produce new ‘compact electric car’ at factory in France

Mercedes-Benz announced today a new €500 million (~$589 million USD) investment into its Hambach plant in France in order to produce a new ‘compact electric car’ at the factory.

The plant currently manufactures smart cars for Daimler, which are going all-electric, but the new investment is for a new Mercedes-Benz compact EV.

The automaker has one of the most aggressive electrification plans amongst established automakers. They plan for Mercedes-Benz and smart cars to offer electric versions of all car models by 2022.

Mercedes-Benz’s broader EV effort will start next year with the first vehicles, the all-electric ‘EQC’ SUV, under their new all-electric ‘EQ’ sub-brand.

This new investment will secure the production of the ‘compact EQ model’, said Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars:

“20 years ago, we started an exemplary Franco-German project with the production of the smart in Hambach. Now we take the next step and for the first time in our more than 100-year old history we bring the production of Mercedes-Benz to France. With the compact EQ model from Hambach we continue our electric initiative.”

Last year, Mercedes unveiled a new all-electric EQA hot hatch concept to their ‘EQ’ sub-brand:

The company has been referring to it as the “compact EQ”, which could mean that it will serve as the basis of the production car that will be manufactured at the Hambach plant.

Annette Winkler, Head of smart, said that they will leverage the factory’s experience building smart electric vehicles for the new project:

“The Hambach site in France features many years of experience in building fully electric cars. We want to take advantage of the enormous expertise and prepare the plant for the production of an electric Mercedes-Benz. We are investing a total of around 500 million euros in the Hambach plant and in the product. It is now paying off for our employees that they already contributed to a significant improvement in the competitiveness of the Hambach site two years ago with the ‘Pacte 2020’”,

Mercedes-Benz says that the preparations for the new model in Hambach will start shortly. The investment will be spent “for the construction of new facilities and also flow in the product itself: With state-of-the-art technology a new body shop and surface treatment will be built. The plant will also expand the assembly facilities and reshape the site’s infrastructure.”

They didn’t say when it will enter production or the annual production capacity of the new car, but Mercedes-Benz aims to bring several EVs to market by 2022.

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