Daimler begins construction on a $562 million lithium-ion battery factory in Germany

Enlarge / Federal Chancellor Dr. Angela Merkel in a conversation with Dieter Zetsche (Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars) and others. (credit: Daimler)

On Monday, German Chancellor Angela Merkel visited the site of a future lithium-ion battery factory in the eastern German town of Kamenz. The factory is being developed by Mercedes-Benz manufacturer Daimler, which will devote approximately a500 million (or $562 million) to churning out batteries for electric vehicles and stationary storage.

If the project seems similar to Tesla's Nevada-based Gigafactory, you wouldn't be alone in making that comparison. Tesla and Panasonic partnered to devote $5 billion to building a lithium-ion battery factory outside of Reno, Nevada, and the electric-car maker has said it hopes to produce 35 gigawatt-hours of auto and stationary batteries by 2018.

Daimler didn't give any projections for its factory's potential capacity, but it did say that its investment would quadruple the size of an existing battery factory on the site, which is run by Accumotive, a wholly-owned subsidiary of Daimler. The German automaker is also pledging another a500 million to expand battery production worldwide. And if all goes well at the Kamenz site, Daimler says it will "go into operation in mid-2018."

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