Daimler Investing $543M to Expand Battery Production

Daimler is building a second factory to produce lithium-ion batteries for its Mercedes-Benz and Smart Car brands as the German automaker expands its lineup of electric and plug-in hybrid vehicles.

Daimler (DAI) announced Monday it will spend $543 million to build a new battery factory in Kamenz, Germany. The Daimler subsidiary Deutsche Accumotive, which will produce the batteries, has purchased about 50 acres of land adjacent to its existing factory.

“To get closer to fully electric driving, we keep investing big in the key component of emission-free vehicles: powerful batteries,” said Dr. Dieter Zetsche, Daimler’s chairman and head of Mercedes-Benz cars, in a release.

In 2014, Daimler announced it would invest approximately 100 million euros ($108 million) to expand its existing battery factory. The new factory will triple the company’s production area. The new production plant is expected to start operations in summer 2017.

Get Data Sheet, Coins2Day ’s technology newsletter.

The new factory also signals Daimler’s interest in producing stationary battery storage units for residential and industrial customers. The company said the new factory would allow it to “tap into” this additional growth opportunity.

Batteries that let individuals, factories, big box stores, and utilities store energy has seen rapid growth recently with 2015 viewed as a breakout year for battery makers. Tesla Motors, the all-electric automaker, added to the buzz around stationary energy storage last year when it introduced its own line of industrial-sized batteries.

For more on electric cars, watch our video:

Daimler established Deutsche Accumotive in 2009 to develop and produce batteries for hybrid and electric vehicles of the Mercedes-Benz and smart brands. Last year, the subsidiary expanded into stationary energy storage. Mercedes-Benz branded energy storage units can be used by private households or scaled up to serve the larger demands of industrial customers.