Daimler, the parent company of Mercedes and Smart, announced Tuesday morning it will make a multi-million-dollar investment in electric car startup Tesla Motors. As part of the deal, Daimler will acquire a 10 percent stake in Tesla. Although a specific figure has not been disclosed, the investment is valued in the tens of millions of dollars.
“It’s fantastic that Daimler has chosen to invest in Tesla,” said Tesla’s CEO Elon Musk.
Mr. Musk noted Tesla could have found other investors to pay more per share than Daimler, but that the value of a partnership with the German automaker outweighed the need for more cash. Moreover, Tesla undoubtedly believes the large investment from Daimler helps make the case for the $300 million in loans the company is seeking from the U.S. Department of Energy in order to build its Model S plant in California.
The agreement involves sourcing battery cells from Li-Tek, a battery manufacturer owned by Daimler and Evonik. Although Daimler’s deal with Li-Tek predates its relationship to Tesla, there is no conflict of interest. Tesla’s expertise is in building whole battery packs from preexisting cells. Li-Tek is therefore likely to become the primary supplier of the necessary cells.
The deal builds upon a previous agreement between the two companies whereby Tesla would provide battery packs for an electric Smart car. Daimler board member Dr. Thomas Weber explained the partnership will begin with Smart, but will later go beyond that.
“The first step is to develop the electric smart car, with the Tesla battery pack,” says Weber. “We will extend in fields like battery and cell management, battery cooling technology, as well as electric drives, with support of Tesla’s know how, it’s a win-win situation.”
“Time will come that we can announce a new project,” added Weber. “If we can combine experience on engineering side, components for brakes, it widen up fields with zero emission vehicles.”
There is speculation Mercedes could provide Tesla with various components — even an entire chassis — for its Model S sedan. However, executives from both companies were mum on the issue.
“Today’s not the day to announce future collaborations,” said Musk.
05/19, 8:27 AM
posted by:
pavlindrom
Wonderful. Finally, nice interiors on Tesla.
05/19, 8:40 AM
posted by:
philsshon
great one more american car companyt hey can kill
05/19, 8:44 AM
posted by:
F50
Hopefully this isn’t DaimlerChrysler all over again.
05/19, 9:39 AM
posted by:
Borat
Tesla reminds me horny Black Widow male spider.
05/19, 10:06 AM
posted by:
scratchy
lol , Borat
05/19, 10:28 AM
posted by:
johnnycanuck
Note to Mr. Musk: Daimler is your friend. And Jekyll and Hyde was after all just a work of fiction.
05/19, 10:32 AM
posted by:
idrinorbarsaku
oh god! what have they done now???!?!?!??!?!?!
05/19, 10:58 AM
posted by:
Struggle
Yeah, but will any of these cars be somewhat affordable for the majority of us?
05/19, 11:34 AM
posted by:
Kid Icarus
Please don’t ruin Tesla like you did Chrysler!
05/19, 12:34 PM
posted by:
JoeKing
Musk is wasting his time in the car business…he should take this con to its logical end
Run for President!!
05/19, 12:35 PM
posted by:
A4
Kid Icarus, Chrysler may be in a shambles, but without Daimler the Hemi, the 300, the Charger, the Crossfire may all have never existed.
05/19, 12:42 PM
posted by:
SomeGreek
Tesla is becoming what it was ment to be from the first place. A small company that can fit batteries to other company’s cars. It’s good to see them reaching their goal so fast!
05/19, 12:50 PM
posted by:
Lariat Luxury Locomotive Liner No.3
Brilliant in many aspects. GM failed. Chrysler failed. The jury is still out on Ford. Tesla will succeed for all the right reasons without the obesity that the BIG 3 suffer. Mercedes will smartly nurture this relationship. Musk is savvy and filled with a realistic determination and optimism.
05/19, 1:31 PM
posted by:
RaineMan
Oh great… I guess Tesla didn’t see what happened to Chrysler.
05/19, 1:34 PM
posted by:
RaineMan
Also… why on God’s green earth are they wanting to build the Model S plant in California? I know of one particular city in Michigan that has a surplus of closed factories and experienced automobile workers. Building in California with all their extra taxes and regulations is going to add a lot of cost to the automobiles.
05/19, 1:34 PM
posted by:
yarddog82abn
The Telsa sedan looks awesome… and with having Benz as a partner, even better!
But lets not forget about Frisker’s Karma… that’s another one to look out for….
05/19, 1:58 PM
posted by:
Bankruptcy2009
I can’t believe must of you don’t realize what is going on here. Mercedes Benz is not really looking for anything more than Rebadging Tesla as a Mercedes. They’re gonna pay to steal intellectual property rights of Tesla’s and make it their own. So even after all Mercedes show’s how lazy they really are. And they call themselves superior. How pathetic!
05/19, 1:59 PM
posted by:
Bankruptcy2009
This is what Mercedes did to Chrysler, Detroit Diesel etc etc on everything they aquired.
05/19, 2:02 PM
posted by:
yarddog82abn
@ RaineMan…
The L.A. times had a article on Telsa 2 weeks ago. It lade out detail how “Arnold” the Governator, has giving Telsa a “GREEN FREE PASS” on TAX’s and stuff, and as for experienced automobile workers, good point. But one reason for the “GREEN FREE PASS”is that Telsa has to employ from the Unemployment Pool, and out East the UAW still has a strong presents, unlike here in Cali. there is no UAW chapter…
I clearly understand your point of view, and I couldn’t agree with you more. I live in California and even dole Telsa was born in Cali., now with Benz in the “Big Picture” that might change soon…
05/19, 2:08 PM
posted by:
acura_el2000
Great news for Tesla, they need support from the bigger guys! Looks like they are going to be sticking around for the long haul
05/19, 2:29 PM
posted by:
SomeGreek
@Bankruptcy2009
What does Tesla have to be rebadged by Mercedes?
05/19, 3:28 PM
posted by:
writeeddie
It will be more interesting to see the Tesla technology powered E-class that a TESLA branded luxury sedan. MB probably spent a lot more than that investment amount to build a widget anyway. It’s a cheap & fast way to acquire the right to use the electric car technology. Seriously, do you honestly believe that we will see the TESLA White Star (or whatever they wanted to call the next sedan) to be a direct competitor to a BMW 5-series fighter??
05/19, 5:24 PM
posted by:
No More Oil For Toyota
bunkruptcy said it right, “They’re gonna pay to steal intellectual property rights of Tesla’s and make it their own.”
..that and whatever else they can steal.
05/20, 9:07 AM
posted by:
fan
the joint venture (or whatever you want to call it) between chrysler and daimler wanst ruined by either side alone.. Both parts did their fair share of bungling it up right to where it ended…
05/20, 11:29 AM
posted by:
shaver
The Germans have been taking things over and mining them with total disregard for a long time. Ask Africa.
05/21, 10:18 AM
posted by:
Bankruptcy2009
I really wish an American Company would really put their minds together and realize that the Electric vehicle by all in tense and purposes replace the IC Engine and we may never need the vastly expensive Hydrogen car. Besides does any remember the HindenBerg Kaboom! Their will be a Nano Material lighter and Denser than Lithium Ion Polymer and that along with Improved Super Capacitors will solve the range and performance issues. Besides the Basic operating principles of the Electric Motor itself could be improved immeasurably if Engineers really took it to task. I think Ford, and Government Owned GM, and Chrysler should either do this on their own or get a piece of Tesla too- heck their in their backyard meanwhile F in Mercedes Benz Jumped over the Pond and Fence to get to Tesla. German Engineering my A**. They gladly sell it back to the stupid wealthy american Consumers and tell them so and they’ll believe it. yeah right! Well you heard it from me first.