Move over, Tesla. You have an unlikely competitor in Daimler AG (FRA:DAI). The German automaker announced in May that it will soon launch a stationary battery business, following a similar move from Tesla, which has become known for its pioneering in the electric car industry with its batteries.
Daimler plans to offer a Mercedes-Benz-branded lithium-ion battery for home energy storage solutions, leveraging the expertise of its fully-owned subsidiary Deutsche Accumotive. The automaker will partner with German utility company EnBW Energie Baden-Wuerrtemberg AG to offer batteries to both residential and commercial customers.
“With our comprehensive battery expertise at Deutsche Accumotive, we are accelerating the transition to sustainable energy generation both on the road and in the field of power supply for companies and private households,” said Harald Kröger, head of Mercedes’ electric-drive program, in a statement. “The technology that has proven its worth over millions of kilometers covered in the most adverse conditions, such as extreme heat and cold, also offers the best credentials for stationary use.”
Tesla recently announced its own plans to launch a highly cost-competitive home storage business. The company says that it has already received 40,000 reservations for its batteries. According to Frank Spennemann, senior manager of business innovation at Daimler, Tesla is both an ally and a competitor.
“On the one hand, if there is no competitor, there’s probably no market. Tesla and our competitors are also opening up a lot of opportunities by creating a big communications boost,” he said. “On the other hand, of course, they are a competitor because they produce more or less comparable products to ours.”
“But, overall, I think it helps if more well-known companies with public recognition are active in the energy storage market, because it might change the thinking of politicians to open up the regulations for more use of storage that can help create a bigger market,” Spennemann added.
While Tesla has announced its product as a 10-kilowatt-hour storage system for $3,500, Daimler has yet to reveal its price points. However, it has been announced that Accumotive will make battery modules in 2.5-kilowatt-hour and 5.9-kilowatt-hour versions. Because Mercedes-Benz has brand power, it’s possible that its price point will be higher, but Daimler expects that safety performance in its battery will be another advantage over the competition.
While the idea of a car company making batteries for home storage may seem odd on the surface, it makes sense for Daimler. This is because it 1) has the resources to do it with its Accumotive subsidiary and 2) Germany is known as a world leader in renewable energy, giving Daimler a perfect opportunity to enter a market that’s ripe for more renewable opportunities.
With Daimler also ramping up its efforts to take over BMW as the world’s largest automaker by 2020, this latest revelation is just another reason to invest in the company. While it may not necessarily be a huge money maker, it shows that a car company is willing to innovate in areas that simply make sense without going beyond its core business.