Mercedes-Benz will join the Automotive Cells Company (ACC) of TotalEnergies and Opel parent company Stellantis.
The three parties will each own 33 percent of the company.
ACC is responsible for the production of battery cells for the battery packs of electric cars.
With this, Mercedes wants to prepare for a switch to only electric cars.
The German brand is considering being fully electric before the end of this decade, if the market demands it.
To do this, it needs a production capacity of battery cells of 200 gigawatt hours (GWh) on an annual basis.
Together with TotalEnergies and Stellantis, Mercedes is already targeting at least 120 GWh per year with ACC.
This involves an investment of more than 7 billion euros.
Mercedes' contribution is expected to amount to just under 1 billion euros.
The brand will also help ACC with technological knowledge and experience with production techniques.
ACC was founded in 2020 and will build production centers in Germany and France.
Besides Opel, brands such as Alfa Romeo, Citroën, Fiat and Peugeot also belong to Stellantis.
Europe is keen to become less dependent on Asian suppliers of battery cells and battery packs.
"China has by far the largest operational battery production capacity, about 2.5 times as much as in Europe and about 70 percent of the global capacity," said Rico Luman, economist at ING Economics Bureau, recently in conversation with NU.nl.
Besides ACC, Volkswagen also has big plans for European battery factories.
For this it works together with the Swedish Northvolt.
See also: Battery factories must make European car industry less dependent
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