BERLIN (Reuters) – Daimler (OTC:)’s Mercedes-Benz on Friday said it will take a 33% stake in battery cell manufacturer Automotive Cells Company (ACC) alongside the project’s original founders Stellantis and TotalEnergies.

Ola Kaellenius (Daimler Chief Executive) stated in a statement that the purpose of this partnership was to “help secure Europe’s place at the centre of the automobile industry” and develop batteries and modules.

Daimler stated that 95% of the batteries it produces would be recyclable, in line with its aim to have a carbon-neutral supply chain by 2039. Daimler stated that ACC will provide battery technology to Mercedes-Benz starting in the middle of next decade.

Daimler announced that it will invest in the project a sum of mid-three-digit millions euros next year. The company also said its total investment would remain below one billion euros ($1.2 million).

ACC has received 1.3billion euros from France and Germany. It is expected to need seven billion euros of equity, debt, and subsidies in order to achieve its 120 Gigawatt hour (GWh), target capacity by the end.

Daimler has eight planned gigafactories. There will be four of them in America and four more in Europe. The existing partners as well as one new unnamed partnership, each with at least 200 GWh.

Although European carmakers make battery packs to power electric vehicles, Asian firms dominate the manufacture of batteries cells.

Kaellenius stated that together with ACC we will efficiently develop battery cells and module in Europe – tailored to specific Mercedes-Benz needs. This new partnership will allow us to ensure supply and take advantage of the economies of scale.

ACC was founded in September 2020 by TotalEnergies of France and Stellantis in France. It already has ties with Germany through a 2 Billion Euro investment in a Kaiserslautern battery plant. Production is expected to begin in 2025.

Daimler stated that it plans to expand its European network.

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