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Daimler (DDAIF) to Begin Manufacturing EV Battery in Alabama

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Daimler AG has announced that it will begin building a battery plant in Tuscaloosa, AL. This move is in tune with the German automaker’s $1-billion planned investment to upgrade its Alabama factory. Notably, the manufacturing hub has started to produce a new sports utility vehicle, the GLE.

Daimler’s latest action supports its strategy to make a mark in the electric vehicles (EVs) market, presently dominated by Tesla, Inc. (TSLA - Free Report) .  In fact, the Mercedes-Benz producer plans to play a key role in the development of e-mobility and attempts to introduce an electric sports utility vehicle (SUV), the EQ.

In a bid to aid its smooth transitional ride from combustion engine to electric vehicles, the company is preparing six factories to wheel out EQ electrified vehicles as well as manufacturing eight battery plants according to Reuters. Notably, the company already has a battery manufacturing plant in Kamenz, Germany and is building more production sites across Bangkok and Beijing.

Per Bloomberg, Daimler in mid-August, planned to produce battery-powered Smart cars in China, setting up a joint venture (JV) with China’s Beijing Electric Vehicle Co. Ltd (“BJEV”). Notably, BJEV is a subsidiary of Daimler’s existing Chinese partner Beijing Automotive Group Co. Ltd. (BAIC Group) that focuses on EVs. Since 2005, the company along with BAIC Group has been manufacturing Mercedes-Benz cars for China. (Read more: Daimler Plans to Manufacture Smart EVs in China)

Year to date, shares of Daimler have underperformed the industry it belongs to. The stock has declined 24.5%, wider than the industry’s decrease of 13.5%.



Zacks Rank & Stocks to Consider


Currently, Daimler has a Zacks Rank #4 (Sell) while Tesla carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) and Navistar International Corporation , each stock carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have surged 36.5%.

Navistar has an expected long-term growth rate of 5%. Over the past six months, shares of the company have rallied 12.6%.

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