German luxury carmaker Mercedes-Benz said Thursday it would invest $1 billion in an Alabama factory as it prepares for electric vehicle production in the United States.

"We are significantly growing our manufacturing footprint here in Alabama... We will be able to quickly ramp up US production of EQ models," the carmaker's battery-electric range, Mercedes executive Markus Schaefer said in a statement.

Mercedes' Tuscaloosa plant, in operation since 1997, employs around 3,700 out of the carmaker's 22,000 US employees, and produced some 310,000 vehicles last year, the company said.

It was already slated to build next-generation plug-in hybrid SUVs and now the move into all-electric cars will complete the picture.

The fresh expansion, expected to add around 600 jobs and a battery production plant to the site, comes on the heels of a $1.3-billion (1.0-billion-euro) investment in 2015.

Production of all-electric models is expected to start in the early 2020s, Mercedes said.

Mercedes-Benz parent company Daimler vowed this month to offer all-electric or hybrid versions of all vehicles sold under the three-pointed star brand by 2022.

German carmakers are scrambling ahead with electric mobility as a diesel emissions scandal drags on, hoping to curry favour with governments and regulators and prevent their internal combustion-powered models being banned from roads.

And manufacturers of all nationalities have been eager to show off big investments in US jobs since the election of Donald Trump, who surged to power on a wave of "America First" rhetoric promising to bring back skilled factory work.