"We are very happy that an investor that has been with us for a few years has entrusted us again and in the same place in Jawor," Morawiecki said at a press conference, according to public news channel TVP.

Daimler is already building a plant to produce engines in Jawor.

Mercedes-Benz Cars board member Markus Schafer told the conference that the new investment would create 300 jobs and that investments would total over 200 million euros.

Daimler will buy battery cells worth more than 20 billion euros ($23 billion) by 2030 as it readies mass production of hybrid and electric vehicles, the company said in December.

The company is one of a number of German automakers expanding in electric vehicles as European regulators clamp down on toxic diesel emissions.

The auto industry currently has a range of different battery recipes competing for use in battery cathodes. One is NCA, or lithium nickel cobalt aluminium oxide, produced by Panasonic and used by Tesla.

Chinese manufacturers use a composition called LFP which has a lower energy density but does without cobalt, while Japanese carmakers use LMO, or lithium manganese oxide, which is used by Nissan and LG Chem.

(Reporting by Pawel Florkiewicz and Joanna Plucinska; Editing by Louise Heavens)