Mercedes-Benz is set to invest billions of dollars in modernizing its production plants in China, Germany and Hungary over the next few years as the company prepares to shift to producing electric vehicles and reduce emissions.
According to Automobilwoche, a German magazine, Mercedes-Benz is investing a three-digit million amount per plant in the lead-up to the switch to electric vehicles, which covers its Beijing, Rastatt and Kecskemet plants.
The report added that the modernization efforts aim to decrease the company’s energy and water consumption and reliance on gas as an energy source, aiming for carbon-free energy instead.
Production manager Joerg Burzer said that the company would reduce the number of models produced in Rastatt from seven to four and refocus its resources there to start the production of the first model of the compact vehicle Mercedes Modular Architecture (MMA) platform in 2024.
The German carmaker is also considering expanding its EV-focused Tuscaloosa plant in the United States, where the company can benefit from government subsidies under the Inflation Reduction Act.
“The framework conditions worldwide change again and again, we may have to react to that,” Burzer said, emphasizing the company’s preparedness to adapt to any potential changes in the regulatory environment.
If market conditions are favorable, Mercedes-Benz plans to transition to a fully electric lineup by the end of the decade.
This move is in response to the European Union’s target of a 50 percent reduction in CO2 emissions per passenger car over their lifespan by 2030. The EU’s efforts to phase out the sale of fossil fuel vehicles by 2035 have also exerted additional pressure on the company to prioritize electric vehicle development.
Mercedes-Benz is confident that its core brand value of “sophisticated excellence” will remain intact despite the shift toward electric vehicles. According to Burzer, the company’s future vehicles will be just as captivating, safe and comfortable as their current models while also setting new standards for environmental friendliness.
The modernization and expansion plans align with the global trend of reducing the use of fossil fuels in transportation, and other car manufacturers are expected to follow suit in the coming years.