FRANKFURT (Reuters) - Daimler (DAIGn.DE) will spend about 100 million euros ($125 million) in coming years to increase production of lithium-ion batteries in eastern Germany.
The German automaker said on Monday it will expand capacity at Deutsche ACCUmotive, its battery-making division in Saxony as it expects "high and steadily-growing demand" for electric-car batteries.
The unit supplies batteries for the luxury Mercedes division's hybrid S-Class, E-Class and C-Class models, Daimler said.
Steps to increase battery output tie in with Daimler's plans announced last month to phase out production of lithium-ion battery cells at its second Saxony-based Li-Tec division by the end of 2015.
Daimler aims to employ the bulk of Li-Tec's 250 workers at Deutsche ACCUmotive.
The Stuttgart-based manufacturer in future plans to buy battery cells for its 2016 electric Smart model from LG Chem <051910.KS>.
Asian makers of battery cells such as Samsung <005930.KS>, Panasonic <6752.T> and LG Chem are producing the cells at lower costs, reaping benefits from scale effects as they're also serving non-automotive industries, analysts said.
(Reporting by Andreas Cremer; Editing by Kirsti Knolle)