Daimler Takes A 10 Percent Stake in Tesla Motors.

Silicon Valley electric car manufacturer Tesla Motors got another shot in the arm today from German auto giant Daimler, which took a 10 percent stake in the company and expanded its partnership with Tesla to equip future Mercedes-Benz vehicles with electric lithium-ion batteries. Mercedes has been testing Tesla’s batteries in a fleet of 100 smart cars, and is already moving into limited production. But with this agreement, Mercedes now expects to roll out its first battery-powered Mercedes-Benz in 2010, and offer battery-powered vehicles for all of its models by 2012.

The amount invested was not disclosed, but even more valuable to Tesla is the vote of confidence from one of the world’s leading auto companies. In a press release, Daimler proclaims: “Tesla is the only production automaker selling a highway capable electric vehicle in North America and Europe.”

The money will no doubt help as well, since Tesla still needs a few hundred million dollars to produce its own $50,000 Model S, which is half the price of its first car, the Tesla Roadster. The company is still applying for $350 million in government loans to get the Model S into production, but it looks like Mercedes will have at least its B-class cars on the road first.

Tesla’s real business may be in supplying the electric drive trains for other vehicles. The Roadster and Model S might just turn out to be really expensive demos. I wonder if Mercedes has an exclusive license to Tesla’s battery technology, at least for a few years. (Update: Tesla says there is no exclusivity. According to spokesperson Rachel Konrad, “This investment obviously establishes a very close relationship between the two companies, but Tesla still plans to continue with its strategy of growing its powertrain business through sales of EV components. This investment does not preclude Tesla from growing such relationships with other automotive OEMs.”)

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Comment by toes on May 24, 2009 at 6:36pm
I am not sure what the engine of the future will look like, but I find the discussion about running out of battery power or forgetting to charge it a little funny, as the same can happen with a gasoline powered car or a hybrid (my boss actually managed to run a Prius out of gas ... a story that never stops being funny). Range is important, but battery technology is evolving quickly, and recharging time is getting lower. There was actually a laboratory breakthrough earlier this year where the scientist were able to charge a battery in minutes through some new process (I forget the details). Another option Tesla was working on is the availability of a network of recharging stations where you could quickly change out the entire battery pack for a fully charged one in less than 5 minutes ... where there's a will there's a way. Imagine driving to the pharmacy to get gasoline (something Carl Benz had to do with the first gasoline powered car he devised, the "Benz Motorwagen"). I think it is exciting that Mercedes Benz is once again getting in on the forefront of innovation (albeit by having to buy into it), and that the smart may be one of their first models to benefit from it.
Comment by Robert Basil on May 21, 2009 at 2:21am
But you are missing the point. Public perception is what sells cars and the public wants a car that does not use any gas. Auto manufacturers are going to make what the public wants, because that is what they will make the most money from. They don't care about making a better product if they can make more money with an inferior product. Supply and demand is king in the automobile industry, not quality.
Comment by Brett Harrison on May 21, 2009 at 1:14am
I know, but when the minority of drivers complain about constant loss of power, we will see a breakthrough somewhere. I still believe that a car ran on battery power completely with a gass engine generator is the best idea I have ever heard of and should be implemented instead of one hundred percent electric or one hundred percent hydrogen.
Comment by Robert Basil on May 21, 2009 at 1:04am
The automakers don't care. They are only interested in the majority of drivers.
Comment by Brett Harrison on May 21, 2009 at 12:58am
true, but that all depends on where you work. If you work farther away and forget to plug in overnight, then getting to work might be harder than you think.
Comment by Robert Basil on May 20, 2009 at 6:15pm

Currently neither battery power or hydrogen power are a practical solution (for long trips). But for short trips of which most Americans take on a daily basis (over 85% of us drive less than 100 miles a day on average) battery power is a much more practical solution than hydrogen due to the lack of hydrogen refilling stations.
Comment by Brett Harrison on May 20, 2009 at 2:23pm
Unfortunately, I am starting to believe that battery power is not the most practical technology. It is a step in the right direction, but it is not practical for people on long trips unless you make the battery run until it is out of power and a small gas motor will come on to charge the battery. A one hundred percent electric car is way too impractical because if you are going to take a long trip, how will you ever be able to get anywhere without recharging with the recharge taking hours and hours of time? A hydrogen car in my opinion is the future of the automotive industry because hydrogen can be refilled at a refilling station, yet the technology is not yet there to mass produce safe hydrogen cars and refilling stations.

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