Mercedes EV production launches in Alabama

Mercedes-Benz on Thursday flipped the switch on a critical initiative in its attempt to catch up to EV front-runner Tesla.

The German luxury automaker announced the start of production of its first U.S.-made electric crossover — a battery-powered version of the GLS SUV.

Mercedes' 6-million-square-foot assembly plant in Vance, Ala., will supply global output of the full-sized EQS SUV, which rolls into U.S. stores in the fall.

The EQS SUV is the first of two EVs produced this year at the assembly plant 40 miles southwest of Birmingham, Ala.

The U.S. factory, one of seven EV production sites on three continents, could deliver more than 100,000 EVs next year, or about a third of its 305,000-unit annual capacity.

Jörg Burzer, global head of Mercedes-Benz production, said the automaker's manufacturing network is "well positioned for the sustainable and rapid scaling of electric vehicle volumes."

The company's Alabama plant will continue to build gasoline-powered versions of the GLE and GLS alongside the battery-electric variants. EV production will integrate into the plant's existing body and paint shop and assembly lines.

The newly electrified Alabama plant is part of an "EV Belt" emerging across the Southeast.

Ford Motor Co., General Motors and Volkswagen have announced battery-vehicle assembly plants in neighboring Tennessee. Volvo will begin building electric crossovers at its Ridgeville, S.C., factory early next year.

Meanwhile, Georgia has landed multibillion-dollar EV factories from Hyundai Motor Co. and Rivian Automotive.

Mercedes has invested in battery production and an ecosystem of suppliers to prepare for EV production in Alabama.

In March, the automaker opened a 177,000-square-foot battery assembly venture located on 270 acres near the main vehicle factory.

And in April, supplier Envision AESC said it will build a $2 billion factory 300 miles away in Bowling Green, Ky., to supply a new generation of battery components for Mercedes.

Envision AESC's battery cell and module plant will open in 2025 and employ 2,000 workers. It will be able to supply 300,000 vehicles a year by 2027.

Envision AESC Group CEO Shoichi Matsumoto said the Kentucky factory will also supply other U.S. automakers as the industry amps up its electrification plans.

"We will produce batteries for numerous electric vehicle manufacturers," Matsumoto told Automotive News. "We have growth plans for both the U.S. and other regions around the world."

Much is riding on the Alabama plant as Mercedes pivots into an all-electric brand in markets ready for the switch.

The company expects EVs to account for about half of its U.S. sales by 2030, executives revealed at the brand's national dealer meeting this year. Next year, Mercedes aims to sell up to 45,000 EQ-branded electric vehicles here.

Mercedes launched its all-electric EQ subbrand with the debut of a battery-powered S-Class sedan last fall. The EQS SUV will be joined this year by two electric crossovers, the compact EQB and midsize EQE SUV. Next year, the portfolio expands with the arrival of the EQE midsize crossover.

The EQS SUV, built on Mercedes' new EVA2 platform, is powered by a 107.8-kilowatt-hour battery that delivers an estimated 400 miles of driving range.

The single motor rwd EQS 450+ delivers 355 hp, while the dual-motor EQS 580 4Matic pumps out 536 hp.

A Maybach variant of the electric SUV will also be built in Vance and exported to Europe and other global markets.

The Inflation Reduction Act, recently signed by President Joe Biden, will make it difficult for many current SUV and crossover models to qualify for the $7,500 federal tax credit for new electric vehicles. But the EQS will qualify for the credit through Dec. 31.