Mercedes Opens Alabama Battery Factory, Part of the Southern Wave

WOODSTOCK, Ala. — The auto industry’s transition to battery power is expected to result in job losses because making an electric vehicle requires fewer workers than making a gasoline-powered car. But that probably won’t be the case in Alabama.

The state became the beneficiary this week of a factory that will produce battery packs for a Mercedes-Benz electric sports utility vehicle. Tuscaloosa, Ala., where the German automaker has produced traditional SUVs since the 1990s. There is a large factory complex nearby.

Mercedes supplied these factories with internal combustion engines primarily made in Europe. These now imported components will gradually be replaced by batteries made in the United States.

“It’s definitely a clear positive for the state,” Mercedes CEO Ola Källenius said in an interview after an event Tuesday to celebrate the opening of the battery factory in a rural location a few miles from the current factory. factory.

The battery plant, which will employ 600 people and become fully operational in April, is an example of how the transition to electric vehicles increases fuel consumption. investment wave in the south.

Mercedes has invested $1 billion in its extensive facility in Woodstock, Ala., and refitted the company’s production complex near Vance to produce a range of electric SUVs.

Automakers are building or planning more than a dozen new factories to make batteries for electric cars, almost all in Southern states. Ford plans to build a complex electric pickup trucks Stanton, Tenn., which will receive its batteries from a new factory in Glendale, Ky.

Alabama Secretary of Labor Fitzgerald Washington, one of several public officials attending the inaugural event, said Alabama officials were “ecstatic” about the Mercedes investment.

While the area’s unemployment rate is low, Mr. Washington said the factory offers better-paying, higher-skilled jobs and will attract workers from parts of the state with unemployment above 10 percent.

The factory will first use imported battery cells, energy-storing components, to assemble battery packs that can be installed in vehicles. But Mercedes announced this week that it will be working with Japanese battery manufacturer Envision AESC to set up a cell factory, possibly at a designated location in the region.

Pressure to procure US-made parts could be accelerated by escalating geopolitical tensions, including the Ukraine war, which has disrupted supply chains. Mr. Källenius said Mercedes would want to have local cell production anyway, but added: “At this time of insecurity and uncertainty, this certainly makes this decision perhaps even clearer.”