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The Tuscaloosa plant will manufacture electrified SUVs under the company's new 'EQ' sub-brand.

Daimler has announced a $1 billion investment to expand its Mercedes-Benz factory in Alabama, confirming US production for upcoming electric vehicles.The Tuscaloosa facility will eventually churn out electrified SUVs under the company's new 'EQ' sub-brand, recently highlighted via the Concept EQA that bowed in Frankfurt.

Daimler also plans to build a battery factory adjacent to the vehicle assembly plant, apparently mirroring the company's previously announced $735 million plan to build EVs and batteries in Beijing.

"With production locations for EVs and batteries in Europe, China and, now, the U.S., our global network is ready for the era of electric vehicles," said Mercedes-Benz production chief Markus Schäfer.

The Tuscaloosa factory currently builds a range of high-riding models including the GLE, GLS and GLE Coupe. Daimler is among several automakers focusing its US production on higher-margin SUVs and crossovers, aligning with a long-running shift in consumer demand from small cars to bigger vehicles.

Mercedes plans to electrify its entire portfolio by 2022, though the commitment is presumably a reference to optional hybrid powertrains for all models. The first EQ nameplate, the EQC, is slated to enter production in 2019 in Germany.