Daimler will launch three new electric platforms and build eight battery cell plants to close the gap to EV leader Tesla.
The Mercedes-Benz maker will invest more than 40 billion euros ($47 billion) between 2022 and 2030 to develop full-electric vehicles, and be ready for an all-electric car market by the end of that period.
But the automaker stopped short of giving a hard deadline for ending sales of fossil-fuel cars.
"Mercedes-Benz will be ready to go all electric at the end of the decade, where market conditions allow," Daimler said on Thursday while outlining its strategy for an electric future.
"We need to move the debate away from when you build the last combustion engine because it's not relevant," CEO Ola Kallenius said. "The question is how quickly can you scale up to being close to 100 percent electric and that is what we are focusing on."
Daimler said that as of 2025, the company expects full-electric and hybrid-electric cars to make up 50 percent of sales, earlier than its previous forecast that this would happen by 2030.
In 2025, the automaker will launch three electric platforms:
- MB.EA will cover medium to large passenger cars, establishing a scalable modular system that will be the "electric backbone" for the future EV portfolio.
- AMG.EA will be a dedicated performance electric vehicle platform for Mercedes-AMG cars.
- VAN.EA will underpin electric passenger minivans and light commercial vehicles.
Daimler will also build eight battery plants, with partners. Four will be in Europe and one in the United States. It said it will need battery capacity of more than 200 gigawatt hours as it ramps up EV production.
Daimler said it would announce new European partners for its battery production plans soon.
Mercedes is in talks with partners to develop solid-state batteries with high energy density, the company said.
As part of its electrification strategy, the automaker will build a battery recycling plant in Kuppenheim, Germany, which will start operations in 2023.
Daimler is also acquiring British firm YASA Limited to help it develop high-performance electric motors.
At Mercedes, the shift will see an 80 percent drop in investments into combustion engines and plug-in hybrid technologies between 2019 and 2026, which the group said would have a direct impact on jobs.
EVs have fewer components and so require fewer workers than combustion engine vehicles.
"A transformation of our workforce will involve tough decisions. Yes, overall we must and will reduce our personal costs," Mercedes-Benz management board member and head of human resources Sabine Kohleisen said.
Daimler's announcement comes just over a week after the European Union proposed an effective ban on the sale of new gasoline and diesel cars from 2035, aiming to speed up the switch to zero-emission EVs as part of a broad package of measures to combat global warming.
Ahead of the EU's announcement, automakers had announced a series of major investments in EVs.
Earlier this month, Stellantis said it would invest more than 30 billion euros by 2025 on electrifying its line-up.
Reuters contributed to this report