Mercedes-Benz has entered a far-reaching strategic partnership with the Chinese battery cell manufacturer Farasis Energy (Ganzhou) Co., Ltd., including taking an equity stake.

Key elements of the agreement include the development and industrialization of 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.

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.

The stake 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.

Mercedes-Benz buys battery cells from various partners in the world market, to secure access to the latest technologies as well as ensure the supply to its global production network. Through in-depth know-how in the development and production of highly complex drive systems and research and development expertise in the field of cell production, Mercedes-Benz is involved with its suppliers in meeting the requisite specifications.

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. The production site in Bitterfeld-Wolfen in eastern Germany is currently being planned; an additional plant in the US will follow. This is in line with the Mercedes-Benz strategy of buying where production takes place.