Mercedes-Benz may produce batteries for its plug-in hybrids and electric vehicles in China, Reuters says, citing comments from Daimler AG board member Hubertus Troika. Sourcing the battery cells locally would help cut costs and gain more headway in the rapidly-expanding Chinese market. Additionally, Mercedes-Benz is working on a new design platform for an updated A-Class vehicle that will include a plug-in hybrid variant, according to Auto Evolution.

Mercedes-Benz's year-to-date sales in China are up 28 percent to about 429,000 vehicles, so there is some demand momentum there for potential plug-in vehicle sales. With the C-Class and GLC models in particular gaining in popularity, Mercedes-Benz wants to capitalize further on the Chinese government-funded incentives toward spurring plug-in vehicle adoption as the country tries to address pollution problems in its larger cities. Beijing Benz Automotive Co., Daimler's joint-venture with China-based Beijing Automotive Group, has been making Mercedes-Benz light-duty vehicles in China since 2005.

Meanwhile, in Germany, Mercedes-Benz is developing a platform called MFA 2 that will be used for the next-generation A-Class subcompact plug-in hybrid. Developed with Renault and designed with increased amounts of aluminum, the MFA 2 platform will offer improved aerodynamics for the plug-in subcompact. That model may debut as soon as mid-2018.

Mercedes-Benz is looking to start selling more than 10 new electric vehicles by 2025. Most recently, the company announced in October that its all-electric EQ SUV will begin sales in 2020. That model is slated to have a 70-kilowatt-hour battery pack that will allow the vehicle to deliver 402 horsepower and have a single-charge range of 311 miles.

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