Mercedes Budgets $23 Billion For Battery Cells Over Next Decade

Mercedes says it has committed to purchasing battery cells worth $23 billion between now and 2030. All those cells will be used to build battery packs at factories in Kamenz, Untertuerkheim, and Sindelfingen in Germany, as well as Beijing, Bangkok, and Tuscaloosa, Alabama according to Reuters.

“With extensive orders for battery cells until the year 2030, we set another important milestone for the electrification of our future electric vehicles,” says Wilko Stark, who heads procurement and supplier quality for Mercedes Benz cars.

The company introduced its first all electric SUV — the EQC — in September. It says it plans to bring 130 electric and hybrid models to market by 2022. That’s in addition to the electric vans, buses, and trucks it is getting ready to manufacture. The company has declined to say which manufacturers it will obtain all those battery cells from but it currently does business with SK Innovation, LG Chem, and Contemporary Amperex Technology (CATL), all of which are good candidates.

The battery cells used in the EQC and its siblings will utilize battery cells that contain 60% nickel, 20%  manganese, and 20% cobalt (a 6:2:2 combination), according to the company. Future models will employ battery cells with a different chemical composition — 80% nickel, 10% manganese, and only 10% cobalt.

“Our engineers are also working on a ratio with 90 percent nickel, 5 percent manganese 5 percent cobalt in order to reduce the amount of rare earth metals even further,” the company says. It adds that it is also working on solid-state batteries that will need no cobalt for future products.

In the field of electric cars, different manufacturers already use a number of battery chemistries. Panasonic and Tesla use nickel cobalt aluminum oxide, and the cells manufactured at Gigafactory 1 in Nevada for the Model 3 reportedly use less cobalt than the cells supplied by Panasonic for the Model S and Model X and Tesla is moving toward no-cobalt batteries.

Chinese manufacturers prefer iron-phosphate battery cells that have a lower energy density but use no cobalt. In Japan, carmakers like Nissan rely on manganese oxide battery cells.

Like Volkswagen, Mercedes is struggling to adapt to the new electric car paradigm. It talks a good game but will it be able to move fast enough to stay ahead of the pack?

“We’ll see,” said the Zen master.