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Mercedes-Benz EV ramp-up: new battery plant sets stage for EQS SUV production in the U.S.

Mercedes-Benz opens a new battery plant in Bibb County, Alabama, a few
months ahead of the start of production of all-electric Mercedes-EQ vehicles
in the United States.

The world’s most valuable luxury automotive brand is getting ready to go all
electric by ramping up production of electric cars on three continents. The
new U.S. battery factory underscores the importance of the United States
within the Mercedes-Benz global production network and the status of Alabama
as an export hub for luxury SUVs also in the electric era.

Mercedes-Benz will produce the EQS SUV and EQE SUV in its plant in Alabama,
as part of a global push to produce all-electric vehicles at seven locations
on three continents. The state-of-the-art battery factory in Bibb County
will provide batteries for the new EQS SUV and the EQE SUV.

Ola Källenius, Chairman of the Board of Management of Mercedes-Benz Group
AG:
“The opening of our new battery plant in Alabama is a major milestone on our
way to going all-electric. With our comprehensive approach including a local
cell sourcing and recycling strategy, we underline the importance of the
U.S., where Mercedes-Benz has been successful for decades. We’re proud to
create new, future-proof jobs to build all-electric SUVs ‘Made in the USA’
at a plant that is such an established part of our production family since
25 years.”

The Mercedes-Benz plant in Tuscaloosa, Alabama, has been the production
plant for large SUVs bearing the three-pointed star since 1997. Now the
plant goes electric with the EQS SUV. Mercedes-Benz is providing a first
glimpse of the spacious, progressive and highly digitalized interior of the
EQS SUV, ahead of the vehicle’s official world premiere on April 19th.

Mercedes-Benz Made in America
Since the 1990s, Mercedes-Benz has invested a total of more than seven
billion dollars in Alabama. Of this amount 1 billion dollars was invested
into the battery plant, the logistics centers and to upgrade the production
line to make EV’s. Today, Mercedes-Benz U.S. International (MBUSI) employs
around 4,500 people and also secures an estimated additional 11,000 jobs
with suppliers and service providers in the region. Around four million
vehicles have left the Tuscaloosa plant since 1997, with around 260,000 SUVs
rolling off the production line in 2021 alone. Roughly two-thirds of annual
production is exported, making MBUSI one of the largest exporters of
automobiles from the US.

The highly flexible Mercedes-Benz production system allows different models
and drivetrains to be assembled on a single production line enabling the
plant to adapt to shifts in customer demand. In addition to the GLE, GLE
Coupe, GLS and Mercedes-Maybach GLS two electric models will be added to the
production line, equipped with batteries from the nearby Bibb County plant.

“The global Mercedes-Benz production network is digital, sustainable,
efficient and flexible. Now the new battery plant, with its highly qualified
and motivated U.S. workforce, will be a crucial driver of our electric
vehicle roll-out plan. Team USA will play a major role in the continued
success of Mercedes-Benz and we are proud that our new electric SUVs will
also be built here in Alabama for global markets,” said Jörg Burzer, Member
of the Board of Management of Mercedes-Benz Group AG, responsible for
Production and Supply Chain Management.

Also taking part in the opening ceremony for the battery plant in Bibb
County were Kay Ivey, the Governor of Alabama, and other high-ranking
regional and international guests. “With the production launch of the
ground-breaking M-Class 25 years ago, Mercedes-Benz helped put our state on
the cutting- edge of automotive manufacturing,” Governor Kay Ivey said.
“Today, with the opening of this new battery plant, Alabama is helping
Mercedes accelerate its production of industry leading electric vehicles.
We’re proud to call Mercedes a partner, and we’re excited about the future
that we are building together in Alabama.”

Bibb County added to global battery production network
Production of the high-performance lithium-ion batteries for the EQS SUV and
EQE SUV is CO2-neutral. High-performance lithium-ion batteries are assembled
into a complete system on a production line around 984 feet long with more
than 70 work stations. Using a fully digitalized production process, a
variety of components are combined, including up to twelve cell modules and
the EE compartment, for the intelligent integration of the power
electronics. Up to 600 new jobs will be created in Bibb County.

The battery system, which will be fitted to the EQS SUV, with the option for
up to 7 seats, employs a modular design already seen in the EQS and EQE and
uses highly advanced cell chemistry containing nickel, cobalt and manganese
in a ratio of 8:1:1. The reduction of cobalt content to around ten percent,
in addition to the CO2-neutral production of the batteries, enhances
sustainability.

With the new plant, Bibb County becomes part of the Mercedes-Benz global
battery production network which stretches factories on three continents
including in Kamenz, Germany, Beijing China, Bangkok Thailand, Jawor Poland
and Stuttgart, Germany. The individual factories supply local vehicle
production and, if necessary, are ready for export. Mercedes-Benz is
investing more than one billion Euros in the development of the global
battery production network.

New safety and training concepts were developed for the employees at the
plant. Mercedes-Benz attaches particular importance to training when it
comes to operational and occupational safety. For example, every team member
who has access to the battery plant must complete a comprehensive
high-voltage safety training course. Mercedes-Benz spends a great deal of
time and effort on these training courses, especially as the training is
repeated regularly.

New strong battery partnership enables ramp-up of Mercedes-EQ SUVs in
Tuscaloosa Mercedes-Benz will be ready to go fully electric by the end of
the decade – wherever market conditions allow. To reach its target the
company, together with partners, plans to build eight cell factories
worldwide with a production capacity of 200 Gigawatt hours by the end of the
decade. Mercedes-Benz will expand its partnerships with the world’s leading
battery technology companies.

In order to localize important suppliers, Mercedes-Benz is partnering with
one of the world’s leading battery technology companies Envision AESC.
Envision AESC will supply the Mercedes-Benz battery factory in Bibb County
with high-performance battery modules from a new plant within the U.S.,
supplies will commence from mid of the decade.

“To be the leading luxury brand also in an all-electric future,
Mercedes-Benz is accelerating the roll-out of its EQ models. This year our
portfolio will include nine fully electric Mercedes-EQ models globally, and
we have further exciting new products in the pipeline. Establishing a strong
battery cell partner network in accordance with our global production
strategy is a very important milestone on our way to CO 2- neutrality,” said
Markus Schaefer, Member of the Board of Management of Mercedes-Benz Group
AG, Chief Technology Officer, responsible for Development and Procurement.
“Envision AESC will be a major supplier securing capacity for the next
generations of our Mercedes-EQ products built in the U.S. in the years to
come. With Envision AESC’s net-zero carbon solutions and battery technology,
this new cooperation underlines our holistic approach regarding our
sustainable value chain and allows us to secure supplies, to take advantage
of economies of scale, and to provide our customers with superior battery
technology.”

MO360: Digital and flexible Production
Thanks to its high flexibility and a comprehensive digitalization with the
MO360 digital production ecosystem, Mercedes-Benz is ready to ramp-up and
integrate Mercedes-EQ models into series production at its existing plants.
This becomes evident, for example, at the “marriage”, the connection of body
and drivetrain. The “fullflex marriage” consists of several modular stations
which make the connection of different drivetrain variants, and their
respective vehicle bodies, possible on the same assembly line.

Production efficiency has been significantly increased through comprehensive
digitalization with MO360, the digital Mercedes-Benz production ecosystem.
Process and quality improvements can monitored and be implemented across
Mercedes-Benz passenger car plants thanks to the networked and connected
production system.

MO360 also gives each employee customized information and work instructions
in real time giving team members the best possible support in their daily
work. Appropriate qualifications are particularly important when it comes to
dealing with high-voltage technology.

“Our team here in Tuscaloosa plays a major role in the global success of
Mercedes-Benz. We are proud that not only the new all-electric EQS SUV and
EQE SUV are being built here in Alabama for markets worldwide, but also
their high-performance batteries,” Michael Goebel, Head of Production North
America and President and CEO of Mercedes-Benz U.S. International.

The new EQS SUV
Celebrating its world premiere on April 19th, the new EQS SUV will be the
first all-electric luxury SUV and the third model based on Mercedes-Benz’s
dedicated electric vehicle architecture. With a luxurious interior it is set
to redefine an entire segment. Its interior combines the progressive design,
refinement and comfort that customers love about the EQS sedan with the
space and versatility of the popular large- SUV concept. The look-and-feel
is a sumptuous fusion of digital luxury and innovative new trim elements,
while the “purpose design” of the electric-vehicle architecture delivers
exceptionally generous SUV interior dimensions. Paired with the optional
third-row seating and electrically adjustable second row, this offers a
level of flexibility to fit the full breadth of customer needs with luxury
and style.

The interior design pursues a consistent vision of digitalization, expressed
most impressively by the optional MBUX Hyperscreen, first launched in the
EQS sedan. This 56-inch curved screen sweeps nearly the entire width of the
vehicle cabin. The MBUX Hyperscreen includes the instrument cluster,
infotainment and passenger display in a seamless design. This blends
perfectly with the extreme proportions of the band above it incorporating
the distinctive air-conditioning vents, and the seemingly free-floating
center console below.

Sustainability
Comprehensive sustainability was a central element of the planning criteria,
starting with the highly energy-efficient design of the building itself. For
instance, solar thermal energy is used to heat water, while rainwater
capture and use helps conserve precious natural resources. Further
sustainable initiatives include the intelligent and highly efficient control
of LED lighting and ventilation in the battery assembly area. These are
augmented by air conditioning systems that take advantage of environmentally
friendly refrigerants and modern, energy-saving process technology.
Meanwhile, forklifts are powered by hydrogen instead of diesel fuel.

In line with a the Mercedes-Benz strategy of expanding renewable energy
production at its plants, the Bibb County site’s entire electricity needs
will be met through renewable energy sources from 2024 onwards once planned
solar energy projects gain approval.

In addition to circular design and value retention, Mercedes-Benz is equally
focused on recycling. With a view to the future return of lithium-ion
battery systems from Mercedes-EQ vehicles, the company is expanding its
global battery recycling strategy. Mercedes-Benz is starting to build its
own battery recycling plant in Germany, based on hydrometallurgy. Analogue
to this technology, the company plans to close the recyclable material loop
with high-tech partners for battery recycling in China and the United
States.

Additionally, Mercedes-Benz has entered into a five-year partnership with
The Nature Conservancy worth more than $600,000 to support the Working
Woodlands site in northeast Alabama. Working Woodlands is committed to
preserving, restoring and promoting sustainable forestry and nature-based
approaches.

This also includes the protection of wildlife. The long-term project also
contributes to the fulfilment of Mercedes-Benz’s sustainable business
strategy “Ambition 2039” to have a CO2-neutral vehicle fleet by 2039.

About Envision AESC
Envision AESC is the pioneering battery technology manufacturing arm of
Envision Group, a global green tech company with four other integrated
divisions. Headquartered in Japan it has low-carbon battery plants in Japan,
UK, US and China employs 2,500 people and has produced batteries for more
than 600,000 EVs in 44 countries in the last decade. Envision AESC invests
heavily in next-generation technology to drive innovation and works with
strategic partners to develop capability and craftsmanship, quality design
and technology to deliver exceptional battery performance, range, safety and
cost for our customers. Find out more at www.envision-group.com

Mercedes-Benz AG at a glance
Mercedes Benz AG is responsible for the global business of Mercedes Benz
Cars and Mercedes Benz Vans, with around 172,000 employees worldwide. Ola
Källenius is Chairman of the Board of Management of Mercedes Benz AG. The
company focuses on the development, production and sales of passenger cars,
vans and vehicle-related services. Furthermore, the company aspires to be
the leader in the fields of electric mobility and vehicle software. The
product portfolio comprises the Mercedes Benz brand with the brands of
Mercedes AMG, Mercedes Maybach, Mercedes EQ, G Class and the smart brand.
The Mercedes me brand offers access to the digital services from Mercedes
Benz. Mercedes Benz AG is one of the world’s largest manufacturers of luxury
passenger cars. In 2021 it sold around 1.9 million passenger cars and nearly
386,200 vans. In its two business segments, Mercedes Benz AG is continually
expanding its worldwide production network with around 35 production sites
on four continents, while gearing itself to meet the requirements of
electric mobility. At the same time, the company is constructing and
extending its global battery production network on three continents. As
sustainability is the guiding principle of the Mercedes Benz strategy and
for the company itself, this means creating lasting value for all
stakeholders: for customers, employees, investors, business partners and
society as a whole. The basis for this is the sustainable business strategy
of the Mercedes Benz Group. The company thus takes responsibility for the
economic, ecological and social effects of its business activities and looks
at the entire value chain.

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