Mercedes-Benz said on Wednesday that Chinese company CATL will be its major battery supplier, as the German premium carmaker is accelerating its electrification strategy.

CATL is a global leader in the development and production of lithium-ion batteries. In 2019, the company’s battery product capacity reached 40.25 GWh.

The carmaker is also working with other battery companies, including South Korea’s SK Innovation, LG Chem and China’s Farasis.

Mercedes-Benz and CATL said they have entered the next stage of their strategic partnership, which covers the full range of battery technologies, from cells across modules to entire battery systems.

This includes the CATL cell-to-pack design, which eliminates conventional modules and integrates the cells directly into the battery.

“Working with CATL will see us accelerate our transformation towards carbon-neutrality,” said Markus Schaefer, a board member of Daimler and its subsidiary Mercedes-Benz.

“CATL will be a major supplier, securing capacity for the next generations of our EQ products in the years to come,” he said.

Zeng Yuqun, founder and CEO of CATL, said Mercedes’ tradition of innovation and CATL’s expertise in batteries will mark a decisive step in both parties’ electrification strategies.

Hubertus Troska, a board member of Daimler AG responsible for China, said the two companies will further integrate the partnership into Mercedes-Benz’s “Electric First” strategy and sustainable development.

The two companies have started working on battery products that are to be featured in a number of vehicles within the next few years.

The EQS sedan, which is to be sold in 2021, will feature CATL cell modules. It will have a range of 700 kilometers and its charging time will be faster compared with current models.

In order to minimize their carbon footprint, the two companies have agreed to the carbon-neutral production of its battery products. CATL will use electricity from renewable energy sources, such as wind, solar and hydropower for its production.

The partnership is also expected to accelerate the development and industrialization of cutting-edge battery technologies in Germany.

CATL is building a plant in the European country, which will make it easier for Mercedes-Benz to purchase their battery products.

Mercedes-Benz also plans to run battery factories at seven locations over three continents. It said local battery production is an important factor for its electric offensive. The key element is in being able to flexibly and efficiently meet the global demand for electric vehicles.

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