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Future mobility

Daimler working with Korean EV battery makers

Mercedes-Benz is using Korean battery technology for EQA, EQB, EQC

By Sep 08, 2021 (Gmt+09:00)

Mercedes-Benz unveiled the EQG at the IAA Mobility 2021
Mercedes-Benz unveiled the EQG at the IAA Mobility 2021

Daimler AG is working with South Korean battery makers, already using their technology for electric sport utility vehicles (SUVs) of Mercedes-Benz, as the automaker aims to only develop new models with all-electric capability from 2025.

The German carmaker plans to build eight battery plants in the globe, but South Korea is unlikely to have any of the factories, its CEO Ola Källenius indicated on Sept. 3.

“We already are working with Korean companies in the cell space as well,” Källenius said in an online media roundtable when asked if Mercedes-Benz considers cooperation with South Korean battery makers such as SK Innovation Co., LG Energy Solution Ltd. and Samsung SDI Co.

“The whole cell business is in a very dynamic and fast paced innovation environment at the moment with competition for newer technologies but also reducing cost. So, I foresee in the next ten years very dynamic competition here. Certainly, Korean players will play a significant role in this.”

Daimler AG CEO Ola Källenius
Daimler AG CEO Ola Källenius

USING KOREAN BATTERY TECHNOLOGY FOR ELECTRIC SUVS

Mercedes-Benz’s chief operating officer, Markus Schäfer told The Korea Economic Daily that the company is using South Korea’s battery technology for its electric SUV models including the EQA, the EQB and the EQC, adding the automaker is already in “deep” cooperation with the country’s battery producers. LG Energy Solution and SK Innovation are dominating the European cell market, Schäfer said on the sidelines of the IAA Mobility 2021 in Munich, Germany.

The company will use various locally produced batteries depending on production bases, he added.

Mercedes-Benz plans invest 40 billion euros ($47.3 billion) for eight battery plants to meet its goal to go 100% electric. It is set to construct four in Europe, considering the United States and China for the rest.

“We have a production footprint in Europe, in Asia, and also in North America. So, these eight giga factories will together with our partners be placed as close and as economically sensible as possible to the assembly operations that we have across the world,” said Källenius.

South Korea is an important automobile market to Mercedes-Benz, but it does not have a plan to set up a car production site, given low economies of scale, he said.

That indicated the country is not a candidate for the company’s new battery plant either.

“In terms of putting up a car assembly production site, you have to have a certain scale for that to be economically sensible. And with the volume that we have at the moment in Korea spread amongst many models, that particular scale has not been reached,” Källenius said.

NEW MODELS TO BOOST EV SALES

Mercedes-Benz showed off several electric vehicle (EV) models including the new Mercedes EQE, an electric alternative to the E-Class, the first fully electric for the premium carmaker’s high-performance AMG brand, the EQG, an electric concept version of its boxy luxury off-roader, the G-Wagen, and a concept car for its luxury Maybach brand at the IAA Mobility 2021.

It will launch more new EVs next year to boost sales of the eco-friendly vehicles in coming years, Källenius said.

“If you look at what we’re planning here in the next two to three years, it’s a very rapid ramp up of new models. And in that context as a percentage of our overall sales, of course the EV sales will increase,” he said.

The company is also working on fuel cell models in the commercial segment, although its main focus is on EVs, Källenius said.

“We are also developing fuel cell technology and in our view for heavier applications, a heavy-duty truck that needs to go long distances, or perhaps some bus applications, the fuel cell technology with its energy density becomes interesting,” Källenius said.

“So, both technologies exist in the Daimler portfolio, but with a clear focus and prioritization on the battery electric vehicle,” he emphasized.

Write to Hyung-Kyu Kim at khk@hankyung.com

Jongwoo Cheon edited this article.

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