Mercedes deal catapults Farasis into the battery big time

July 06, 2020 //By Nick Flaherty
Farasis Energy will build a battery gigafactory in German as part of a key deal with Mercedes-Benz
Farasis Energy and its battery gigafactory in German are part of a key strategic deal with Mercedes-Benz.

Mercedes-Benz has signed a key strategic partnership with the Chinese battery cell manufacturer Farasis Energy that includes its battery gigafactory and R&D centre in Germany. 

The deal makes Farasis the 'anchor' battery supplier for the German car maker as it moves to an 'electric first' strategy and includes a stake around three percent and a seat on the board.

The agreement includes the development and industrialization of new battery cell technologies with higher energy density and fast charging, along with with significant cost reductions. While Mercedes and Daimler will continue to use cells from Chinese supplier CATL, the move to a new cell technology for future designs will restrict the choice of battery supplier.

The deal catapults Farasis into the group of major global battery suppliers alongside CATL, Panasonic, LG Chem , Samsung SDI and BYD. All bar Panasonic have, or are building, battery gigactory plants in Europe alongside plants from local companies such as NorthVolt, BMZ and Saft. Farasis has a production plants in Ganzhou and a newly opened plant in Zhenjiang, and is building its new battery gigafactory in Bitterfeld-Wolfen. This is set to start production later this year with an annual target of 6GWh, rising to 10GWh a year. The company has an agreement to supply 140GWh of battery cells to Daimler up to 2027.

Mercedes says the deal will provide a secure source of supply of battery cells, highlighting the intense competition betwen car makers for battery supply. Farasis gains security for its planned construction of production capacity in China and Germany, where the battery gigafactory will create up to 2,000 new jobs and is designed as a CO₂-neutral factory from the start. A US battery gigafactory is also planned.

"We are very pleased to further expand our partnership with Farasis in taking a decisive step within the implementation of our electric strategy 'electric first'," said Markus SchäferMember of the Board of Management of Daimler and Mercedes-Benz. He is responsible for Daimler Group Research and the chief


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