Daimler's EQ will have an electric range of 500 km (Photo: Arjen Bongard)

Daimler started work on a second battery plant in Kamenz in eastern Germany Monday as it prepares for expected strong growth in electric-vehicle sales.

The premium car group said it will invest 500 million euros in Kamenz, part of a global investment of 1 billion euros in battery production.

Daimler R&D boss Thomas Weber said at the ground-breaking ceremony for the facility that Daimler plans to have 10 fully electric vehicles on sale by 2025.

"Highly efficient battery systems are an important aspect of our strategy," Weber said. "They are an integral part of the vehicle architecture and not a ready-made product."

Hence, Daimler has decided that it wants to build batteries in-house, rather than outsource a key technology to a supplier partner. Said Weber: "Production and integration of those complex systems into our vehicles is one of our core competences.”

Battery technology was a focal point for many carmakers at the recent Paris auto show, where many brands showcased new EVs that promise much greater range than the first generation of their electric cars.

Daimler showed a Mercedes EQ concept vehicle that, once it is built later this decade, will have a range of 500 km before it needs to be recharged.

Competitor BMW unveiled an updated version of its i3 electric city car in Paris, promising a range of 300 km, which is roughly double the range of the first i3.

And Renault showed a new version of its Zoe EV with a range of 400 km.