The Daimler AG sign with raindrops is pictured before the company's annual news conference in Stuttgart, Germany, February 4, 2016. REUTERS/Michaela Rehle/File Photo

BERLIN (Reuters) - Germany's Daimler DAIGn.DE said it will invest $1 billion to expand its U.S.-based Mercedes-Benz plant in Alabama to start building electric sport-utility vehicles there from about 2020.

More than 600 new jobs will be created as part of the investment, which includes plans to build a facility in 2018 near the factory in Tuscaloosa to produce batteries for zero-emission vehicles, Daimler said on Thursday, confirming a Reuters story.

Stuttgart-based Daimler is joining a rush to add car-making capacity in the world’s most profitable vehicle market that most analysts and industry executives expect to contract moderately over the next several years.