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Under its new deal with Tesla Motors, Daimler will help engineer the Model S, increasing its performance.

In exchange, Tesla Motors will help Daimler produce and develop the battery packs and systems for its 2012 Smart Car ED followup.  (Source: CarPages UK)
New move provides big boost for one of the few currently-producing electric vehicle makers

While many car companies, including GM, Chrysler, and Ford are cooking up plans for electric vehicles, Tesla Motors is actually making them and selling them.  Despite a rocky 2008 which saw many layoffs and close calls financially for the company, it succeeded in bring its Roadster to the U.S. market.

Now at a special press conference in Mercedes-Benz Museum in Stuttgart, a surprising and intriguing announcement was made -- Daimler, former owner of Chrysler and owner of the Mercedes-Benz brand, is buying a 10 percent stake in the company.  More importantly, Daimler will help Tesla with engineering and parts development.  Dr. Thomas Weber, the head of research and development for Mercedes-Benz, was on hand to make the announcement.

He stated, "Our strategic partnership is an important step to accelerate the commercialization of electric drives globally. 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 companies' strengths. This marks another important milestone in Daimler's strategy for sustainable mobility."

Tesla CEO Elon Musk also was on hand and cheered the news.  He would not reveal how much his company had received from Daimler, other than to comment that it was in the double-digit millions.  This indicates that Daimler's valuation of Tesla to be worth at least $100M USD, a promising sign for the recovering company.

The match seems made in heaven, with both companies focusing heavily on performance vehicles and fuel economy, two sometimes divergent fields.  Daimler will help engineer Tesla's new Model S sedan, while Tesla will help Daimler make a second generation Smart ED electric compact.  Tesla will engineer the battery packs, which use Li-Tec lithium ion cells developed by a Daimler and Evonik joint venture.  Tesla will also have access to the cells for its own vehicles.  The cells are currently scaling to mass production, which should help Tesla be able to produce vehicles quicker.

Looking forward, Daimler plans on having Tesla help it with battery pack integration and battery management systems for its electric vehicles.  The first Tesla-tweaked Smart car will arrive in 2012, with five-digit production planned.  Daimler's Prof. Herbert Kohler (who is in charge of e-drive systems at the German automaker) will take a board position at Tesla and oversee their progress.

With the investment Daimler looks to gain the edge it needs to beat its American EV competitors.  And with the stake, Tesla can finally lay to rest questions of its short-term survival.

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RE: New smart car
By Mitch101 on 5/20/2009 2:33:52 PM , Rating: 1
The difference is the ride on lawnmower will probably last longer and start more reliably.

As the owner of a Chrysler that just recently had the transmission replaced for the third time. I said yes so I can get the trade in value when I buy from a different car company in 3-4 months.

I also own a Dodge to which the month after the final payment the check engine light is on again.

Very sad since I take very good care of my vehicles yet when they should be free and clear they cost me plenty in repairs.

I wouldn't be surprised if AAA offered to make the down payment for me on a different car.

You wont see me in a Dodge/Chrysler showroom again.

RE: New smart car
By FITCamaro on 5/20/2009 4:13:14 PM , Rating: 3
A check engine light really doesn't say much about the quality of the car. My check engine light is on right now because I installed longtubes and am throwing a catalytic converter inefficiency code. Many cars today throw a check engine light if the gas cap isn't on tight enough.

RE: New smart car
By FITCamaro on 5/20/2009 4:15:47 PM , Rating: 4
Let me add, everyone should take their car to Autozone to have them pull the code before going to a dealership. They'll even clear codes if you ask nicely or let you do it (while showing you how). Check engine lights are so damn vague that it can mean anything. I threw a lean cylinder code momentarily on my Cobalt after I changed the air filter. If you're out of warranty and go to a dealership, they'll charge you just to check the code and clear it for you. So get it done for free at Autozone.

RE: New smart car
By DigitalFreak on 5/20/09, Rating: -1
RE: New smart car
By Spuke on 5/20/2009 6:42:56 PM , Rating: 2
That code deson't necessarily mean that the catalytic converter is broken or not effective. It could simply mean the exhaust gas velocity is too high.

RE: New smart car
By afkrotch on 5/21/2009 10:07:43 AM , Rating: 2
My car throws a check engine light if the gas cap isn't on tight. I'm on a 96 Subaru Impreza. Something to do with gas pressure or some crap.

RE: New smart car
By mmcdonalataocdotgov on 5/21/2009 7:48:48 AM , Rating: 3
Daimler does not own Chrysler anymore, and I think this was one of the reasons for getting out. I think they will do a better job with the electric coffin here.

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