July 03, 2020 - Mercedes-Benz is taking another important step on its journey towards CO₂--neutral mobility. The Stuttgart-based luxury car manufacturer has launched a far-reaching strategic partnership with the Chinese battery cell manufacturer Farasis Energy (Ganzhou) Co., Ltd., including taking an equity stake.
This move represents another important milestone towards Mercedes-Benz’s “Ambition2039” CO₂-neutral goal. Key elements of the agreement include the development and industrialization of highly advanced cell technologies, accompanied by ambitious goals for cost competitiveness. The technological focus is on significant increases in range through advances in energy density and the reduction of charging times. The contract will provide a secure source of supply of battery cells for Mercedes-Benz’s electrification strategy, while Farasis gains security for its planned construction of production capacity. In order to be able to meet increasing demand for German Mercedes-Benz plants in the future, Farasis is building a plant for battery cells in Bitterfeld-Wolfen; creating up to 2,000 new jobs. The East German site is designed as a CO₂-neutral factory from the start.
We are very pleased to further expand our partnership with Farasis in taking a decisive step within the implementation of our electric strategy 'Electric first'. By strategically expanding our business relationship, we are pushing the electrification of our model portfolio ahead. With this agreement, we contribute our expertise in the field of battery cell development. At the same time, we are providing a boost for Farasis's new plant and promoting the sustainable development of a key technology and its establishment in Germany. We share with our partner the common vision of a more sustainable world through CO₂-neutral mobility.
Stake of around three percent
With this strategic partnership Mercedes-Benz is deepening its sustainability activities and further strengthening its existing business relationship with the battery cell supplier by taking a stake of around three percent. To this end, Daimler Greater China is investing a multi-million euro amount as part of Farasis' IPO. This equity stake is conditional upon required regulatory approvals. It will give Daimler the option to nominate a representative for a seat on the supervisory board of the battery cell manufacturer. Markus Schäfer, Member of the Board of Management of Daimler AG and Mercedes-Benz AG, responsible for Daimler Group Research and Mercedes-Benz Cars COO would intend to take the seat after a period of 12 months subject to regulatory approval of voting process.
Current contracts with Farasis have been supplemented and include, in addition to technical and commercial contractual components, expanded legal and sustainability requirements. Under certain technological and commercial conditions, the supplier can join projects for the next generations of the Mercedes-Benz EQ products at an early stage. As a strategic partner, Farasis is a fixed cornerstone in the existing set of Mercedes-Benz battery cell suppliers. A balanced supplier set is the basis for access to the best possible technology and a prerequisite for competitiveness.
China is the world’s largest electric car market with tremendous potential for further development. We are already working with strong and trusted partners in China, not only to enhance our local footprint but also to strengthen our competitiveness worldwide. By taking a stake in a Chinese battery cell manufacturer for the first time, we will further leverage the potential of advanced technology partners in the market, enabling us to pursue our electric strategy globally. In the future, we will continue to strengthen our activities in research and development, production and purchasing in China.
Sustainability as an integral part of the partnership
Mercedes-Benz and Farasis had already agreed on a sustainability partnership in the summer of 2019. The first result was the production of battery cells with electricity from renewable energies such as hydropower, wind and solar energy. For example, the next generation of EQ vehicles, including the EQS luxury sedan, will in part be equipped with CO₂-neutral battery cells. Daimler Greater China's investment in the battery cell manufacturer is actively driving forward the development of a key technology for electric mobility and its industrialization. In China, the battery cell supplier has built a plant in Zhenjiang that will be CO₂-neutral. A production site in Bitterfeld-Wolfen in eastern Germany is currently being planned and will be CO₂-neutral from the start. An additional plant in the U.S. will follow. This is in line with the Mercedes-Benz strategy of buying where production takes place.
About Farasis Energy (Ganzhou) Co., Ltd.
Farasis Energy (Ganzhou) Co., Ltd. is a Chinese developer and supplier of lithium-ion battery technologies for a range of markets, including automotive, transportation, commercial and industrial vehicles. Farasis currently employs more than 3,500 people worldwide and has research and development centers in China, Germany and the US. There are currently two production plants in Ganzhou and Zhenjiang (China). Localized battery production locations in Europe and US are currently in preparation.