Mercedes has set the stage for the mass production of luxury electric vehicles in the U.S. And its massive Alabama plant will be key in taking the fight to EV kingpin Tesla.

Suppliers representing 90 percent of the automaker's purchasing volume will supply CO2-neutral parts.

Mercedes-Benz will source 70 percent of its energy needs for production through renewable energy by 2030 by rolling out solar and wind power projects at its plants and through power purchase agreements.

Japan's Envision AESC will invest $2 billion to build a battery-cell and module plant in Kentucky to supply Mercedes-Benz and multiple other automakers.