#CompactEV

Daimler AG has announced an investment of 500 million euros ($589 million) for its plant in Hambach, France, to start production on a compact electric car for the Mercedes-Benz EQ brand. Known as “Smartville,” the complex was purpose built in the 1990s to supply the automaker with the first batch of Smart ForTwos and has been humming along ever since.

While numerous outlets have billed the model as a “Tesla fighter,” the rumor mill claims this vehicle is quite a bit smaller than the Model 3. That sounds reasonable enough, considering the new model would be produced in the same facility as the electric ForTwo and cabrio. However, the multi-million dollar investment will presumably go toward expanding the factory and procuring the EQ its own assembly line. We’ve heard nothing about the new Mercedes being a rebranded Smart vehicle.

There are actually a lot of gray areas to navigate here. While Mercedes spent a lot of time billing EQ as an electrified subsidiary, it’s already tacking the name onto electric Smart cars. The nomenclature now seems intended for any Daimler model with an electric powertrain, plus cleverly styled concept vehicles. Spyshots of the EQC sport utility vehicle, Mercedes’ first official entry into its broader EV effort, show the heavily camouflaged vehicle looking very much like the standard GLC-Class — not the concept EQs we’ve seen in the past.