This could cause serious problems for Mercedes in the future as it expands the electric EQ range.
After launching the EQC globally in 2019, Mercedes is planning to rapidly expand its electric EQ range within the next few years. Earlier this year, Mercedes lifted the wraps off the EQA compact crossover. Next month, the slick Mercedes EQS luxury sedan is expected to make its world debut, followed by the EQE as an electric equivalent to the E-Class. By 2022, Mercedes plans to offer as many as ten different battery-electric cars, but a serious production problem could hamper the German automaker's long-term electrification plans.
In 2019, Mercedes partnered with Farasis, a Chinese-based company that develops and supplies lithium-ion battery cells. Mercedes also acquired a 400-million euro stake in the company last summer. But Germany's Auto Motor Und Sport reports that the first products of the partnership have not been great.
Farasis has reportedly supplied the first battery cell samples to Mercedes, but quality of these samples is so poor that Daimler's manager's described them as "catastrophic." This isn't the only problem, either.
To keep up with the demand for production of battery cells in Germany, Farasis was planning to build a new production plant in Bitterfeld, Germany, in 2022. However, a building permit for the production plant still hasn't been acquired, so this now seems unlikely. To be clear, this setback doesn't affect Mercedes' EQ cars in the short-term.
The battery cells for the EQC, EQA, EQV, and hybrid models are supplied by China's CATL (Contemporary Amperex Technology), and the sedan and SUV versions of the EQS and EQE will also be unaffected.
It could, however, cause serious long-term problems for Mercedes, because Farasis was expected to produce more than half of the cells for European electric Mercedes cars in the future. If the quality of the battery cells doesn't improve, Mercedes might need to find an alternative supplier - but that won't be easy considering the current shortage of battery cells as demand for electric cars increases.