German carmaker Mercedes has said it plans to invest billions of dollars towards the modernisation of its electric vehicle plants in China, Germany and Hungary over the coming years, according to Reuters, citing the magazine Automobilwoch.

This move underlines the automaker's aim to cut emissions, and shift from fossil fuel-powered cars to electric vehicles by the end of this decade, following the same timeline as the European Union, to reduce CO2 emissions per passenger car during their life cycle by half compared to 2020 and a proposed deadline of 2035 to end the sale of fossil fuel cars.

Joerg Burzer, the production manager, revealed that Mercedes will invest hundreds of millions of dollars per plant in Beijing, Rastatt, and Kecskemet for the upgrade, with the Rastatt plant being the first to work on the compact vehicle platform MMA from 2024. Mercedes will cut down the number of models produced there from seven to four.

Furthermore, the automaker intends to invest a low single-digit billion dollar sum in modernizing the painting systems at its Sindelfingen, Bremen, and Rastatt plants in Germany to lower energy and water consumption, as well as reduce the painting system's dependence on gas in favour of carbon-free energy.

The company is also reportedly considering expanding its Tuscaloosa plant in the United States to take advantage of government subsidies under last year's Inflation Reduction Act.