German automobile manufacturer Daimler AG said it will invest around €500 million in its Hambach plant in France to start producing compact electric Mercedes-Benz cars, in addition to its electric cars currently manufactured for the Smart brand.

The company said preparations for the production of the new compact EQ model from Hambach will begin soon.

"The smart plant in Hambach will become a part of our global compact car production network with the lead plant Rastatt, Germany," said Markus Schäfer, member of the divisional board of management of Mercedes-Benz cars, production and supply chain.

Daimler said it will electrify the entire Mercedes-Benz portfolio by 2022, with at least one electrified alternative in all segments.

The carmaker plans to launch more than 10 electric cars across all segments by that year, from the Smart car brand to large SUVs.

Unit sales of electric models will represent 15% to 25% of total Mercedes-Benz sales by 2025, Daimler projected.