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Daimler Buys 10 Percent of Tesla, Forms Strategic Development Pact

By KBB.com Editors on May 20, 2009 9:10 AM
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In a move that can't help but bolster the fortunes of Tesla Motors, Inc and the fledgling electric vehicle (EV) industry in general, Daimler AG has purchased nearly a 10 percent equity position in the Silicon Valley manufacturer of electric cars. Key terms of the agreement, which was formally announced at the Mercedes-Benz headquarters in Stuttgart, include closer collaboration between the two companies in the areas of battery system development, electric drives and vehicle projects -- as well as making Prof. Herbert Kohler, Vice President E-Drive and Future Mobility at Daimler AG, a member of Tesla's board of directors.

Prior to signing this new accord, Tesla had been working with Daimler to supply its Lithium-ion (Li-ion) battery packs and charging hardware for use in the first run of 1,000 electric-powered smart fortwo EVs that are currently undergoing field tests in various world markets.

Dr. Thomas Weber, Member of the Board of Daimler AG, responsible for Group Research and Mercedes-Benz Cars Development, views this strategic partnership as a critical step on the road to the global commercialization of EVs. "As a young and dynamic company, Tesla stands for visionary power and pioneering spirit. Together with Daimler's 120 years of experience in the automotive sector this collaboration is a unique combination of two company's strengths. This marks another important milestone in Daimler's strategy for sustainable mobility."

Tesla CEO and Product Architect Elon Musk foresees an equally positive outcome for his firm as the result of the linkup. "Daimler is also on the leading edge in the field of sustainable mobility. Among others the lithium-ion pouch-cell battery developed by Daimler and especially designed for automotive applications is of interest to us. We are looking forward to a strategic cooperation in a number of areas including leveraging Daimler's engineering, production and supply chain expertise. This will accelerate bringing our Tesla Model S to production and ensure that it is a superlative vehicle on all levels."

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