Mercedes-Benz owner Daimler is investing $1bn to produce electric cars in the US for the first time as it steps up its challenge to its leading rivals by establishing manufacturing bases to build new technology vehicles across three continents. The German group said it will invest the money to prepare its manufacturing plant in Tuscaloosa, Alabama, for producing electric cars, meaning it will have production locations for EVs and batteries in Europe, China and now the US. The US plant will manufacture sport utility vehicles for the company’s EQ brand — a line-up of electric-only cars set to compete with new rivals such as Tesla and old foes such as BMW and Audi, which are also preparing ambitious shifts into battery-powered vehicles. The investment is expected to create more than 600 jobs in the region, adding to the 3,700 strong workforce that created more than 310,000 vehicles last year. Mercedes’ first EQ series model, the EQC, will go into production in 2019 in Bremen, Germany. Its first electric SUV will be produced at the start of the next decade, and by 2022 the brand pledges that the “entire portfolio of Mercedes” will include at least one electrified model, including pure EV, hybrid and “mild hybrid” 48-volt vehicles. Markus Schäfer, Mercedes’ head of production, said the three locations mean the company and its global network is “ready for the era of electric vehicles”.