The German carmaker is preparing to transition from producing combustion engine powered vehicles to battery powered electric vehicles.

Automotive giant Daimler AG stated, it will commence the building of a battery plant as part of its planned $1 billion investment to upgrade its factory in Tuscaloosa, Alabama.

The development comes in the wake of this factory starting to produce a new sports utility vehicle (SUV) – the GLE.

The news comes at a time when Daimler’s parent Mercedes-Benz is preparing to launch an electric SUV – the EQ – as part of a broader strategy to increase its footprint in the electric car market dominated by Tesla.

“We aim to play a pioneering role in the development of e-mobility and are well-prepared to accomplish this mission,” said Markus Schaefer – a member of Daimler’s board.

Mercedes-Benz is preparing six factories to produce EQ electrified vehicles, and to manufacture eight battery plants. Clearly the German carmaker is shifting gear to shift its production of combustion engine powered vehicles to electrically powered ones.

Incidentally, Daimler already has a battery manufacturing facility in Kamenz, Germany, and is building further plants in Beijing and Bangkok.

Daimler said its home plant in Sindelfingen will be the center of competence for building large autonomous and electric cars. Sindelfingen currently makes the Mercedes-Benz S-Class model.