A couple of weeks ago Mercedes-Benz announced to invest €500 million into a new battery manufacturing facility in Germany, which is part of a wider strategy to invest €1 billion into battery production globally. This was followed by the announcement last week to also expand into the U.S. energy storage market.
The scale of the investment – compared to €5 billion R&D expenditure for the entire Daimler Group in 2015 – is an incredibly strong statement for the group’s electric vehicle and energy storage strategic plans.
In the long-term the company will want to be leading the EV market. At the same time the company is driving its fledgling energy storage business both in the behind-the-meter and grid-scale segments. We believe that the energy storage venture is core to increasing production capacity in the short-term, which in turn will also reduce costs for the battery modules required for Electric Vehicles.
The residential product – a Mercedes for your home?
One thing is certain – the company is investing significantly into the marketing and appearance of the product and brand. It could be this approach that resonates with the residential end-customer – either with existing Mercedes-Benz car owners or ‘if you can’t have a Mercedes car in your drive, at least have a battery storage system in your home’.
Larger scale energy storage applications
So far the company is realising two large scale energy storage projects – first a project with a size of 13 MW in Lunen, Germany aimed at providing Primary Control Reserve and a second 15 MW / 15 MWh project in Hannover, Germany. We expect more to follow.
What role will automobile players have?
Mercedes-Benz is not the only automobile company looking to enter the energy space – with Tesla, Nissan and BMW (U.S.) all launching their own stationary energy storage products. While the largest manufacturer of passenger EVs, BYD, has also established themselves as a major supplier of battery storage systems.
Manufacturers are looking to create synergies between their EV and energy storage businesses, but scale and low cost points will not be the only factors deciding who wins out in the long-term. The winners will be those that understand energy markets and quickly develop innovative business models – something that traditional car manufacturers may not always be best at.
Delta-ee’s Energy Storage Research Service helps you to exploit the emerging opportunities, understand what propositions are leading the market today and will shape future growth. To learn more, please get in touch with Julian Jansen, manager of the Delta-ee Energy Storage Research Service.