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Mercedes to produce EVs, batteries in China
Bloomberg | 2016/12/9

Mercedes-Benz plans to build a battery plant and make EQ electric cars in China, as regulators crack down on pollution and energy waste.

"It's our strategy to localize production in China, and that goes for electric cars too," said Hubertus Troska, the German automaker's chief of Chinese operations. "China's government has a strategic goal to fire up electric vehicles, aimed at improving air quality but clearly also at lessening dependence on oil imports."

China is considering a quota that would require automakers to generate at least 8 percent of deliveries from pure electric cars, plug-in hybrids and fuel cell vehicles. The proposed quota would take effect in 2018.

In recent years, EV sales have risen sharply in China as the government offers subsidies and imposes taxes on gas guzzlers.

Initially, Chinese automakers generated most of those EV sales. Now, international automakers are starting to produce EVs in China to protect their access to that market.

Mercedes markets a made-in-China plug-in hybrid C class that uses batteries made by local suppliers.

In September, Mercedes unveiled a 10-billion euro (74 billion yuan) plan to develop 10 electric models, including a crossover for its new EQ brand set to enter showrooms before the end of the decade.

Daimler has earmarked 1 billion euros to boost battery production, and so far it has invested 500 million euros to double capacity at its plant in Kamenz, Germany.

Getting consumers to buy EVs in China will require solving the same issues hampering sales of green vehicles everywhere, Troska said. For example, automakers must improve the range of EVs and ensure that charging stations are available for apartment dwellers.

Troska said, "We'll see in about five years if the fish likes the worm."

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