Daimler plans to produce its own battery cells, report says

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German luxury carmaker Daimler AG is planning to manufacture its own battery cells, Business Insider reported on Tuesday, citing company sources.

The move comes a week after Manager Magazin claimed that the Mercedes-Benz maker intends to accelerate the phase-out of conventional powertrains in its cars, a move that will only increase the importance of its battery supply.

If the report is confirmed it would represent a major strategy shift for the Stuttgart-based giant as it scrambles to make the transition to electric mobility.

Daimler didn’t confirm the Business Insider report, saying only that “We will issue comprehensive information about our activity in this segment in the course of the year.”

The company’s CEO Ola Kallenius had previously signaled it would rely on third-party suppliers for batteries.

In 2019, Daimler struck a deal to buy lithium-ion battery cells from Farasis Energy, and the Chinese-American supplier had intended to build a factory in East Germany to help ramp up electric vehicle production.

However, the plant has not yet been built, and there were issues with the initial cell samples, which prompted a change of heart from the Daimler chief executive.

Business Insider also reported it was unclear whether Daimler wants to manufacture the battery cells independently or with a partner.

Last month Daimler reportedly intensified its partnership with Chinese battery maker Contemporary Amperex Technology (CATL) as part of plans to speed up electrification.

(With files from Reuters)