Investment is in addition to €10 billion ($15.5 billion) in vehicle development costs
Mercedes-Benz has ordered €20 billion ($31 billion) worth of lithium-ion battery cells, which will see the company through until 2030.
The German automaker expects battery-electric vehicles to account for between 15 and 25 per cent of its annual sales by 2025.
To put that into context, the company sold a total of 3.3 million vehicles in 2017. Assuming zero growth, that would equate to between 495,000 and 825,000 electric vehicles.
According to Mercedes-Benz, the take-up rate will depend on "individual customer preferences and the development of the public infrastructure".
By 2022, Daimler says it will have at least one electrified variant in every model range, with a total 130 variants boasting either mild-hybrid, plug-in hybrid or fully electric drivetrains.
Mercedes-Benz will source its battery cells from all over the world, and the company is currently producing battery packs in Europe, with facilities planned for China, Thailand and the USA.
Above: Mercedes-Benz EQC.
Concerns have been raised about how various metals used in lithium-ion batteries are sourced. Reports in The Washington Post and Fortune have detailed the awful conditions suffered by workers in cobalt mines in the Democratic Republic of Congo, which has up to 75 per cent of the world's reserves of the metal.
The automaker says it requires all new suppliers to go through rigorous analysis encompassing its entire supply chain. Direct suppliers are required to "firmly pass on and monitor our sustainability standards within the supply chain".