The plant about 50 kilometres from Dresden is part of a €1bn investment spree by the German carmaker into the global production of battery systems, and will be one of Europe’s biggest and most modern battery factories, Daimler says. It is slated to be operational in mid-2018.

A rapid expansion of global battery output is seen as a catalyst for the price decline in solar energy storage systems that use the same lithium-ion technology.

Germany currently is also in an incipient discussion about phasing out non-electronic cars altogether, possibly by 2030, which would give an enormous boost to the need for renewable energy capacity.

“By 2025, our passenger car product portfolio will contain more than ten fully electric vehicles,” says Thomas Weber, a member of Daimler’s board of management.

“Highly efficient battery systems are an important aspect of our strategy.”

Production facilities at Kamenz will be powered by a cogeneration unit and a 2MW photovoltaic system combined with stationary energy storage systems.

Daimler is the producer, among others, of the Mercedes Benz and Smart car brands.