Daimler AG’s 10% stake in California-based Tesla Motors Inc. represents a gradual shift in the EV landscape. The German automaker will place Professor Herbert Kohler from its E-Drive and Future Mobility section on the Tesla executive board. Tesla and Daimler have been working over the past year to blend the former’s electric drive system with the latter’s smart car design. The investment in Tesla will allow Daimler to advance its alternative fuel inventory while helping the California automaker reduce its model prices.
Tesla is contributing about 1,000 lithium-ion batteries and charging units to the electric version of Daimler’s Smart fortwo. Daimler has plans to produce 1,000 Smart fortwo by fall 2009 for municipal transport programs in Italy and Germany. These EVs are currently roaming the streets of London as part of a fleet test that started in 2007. The venerable automaker is planning to unveil a BEV Mercedes-Benz by 2010 with plans to replace lead-acid batteries in every model with lithium-ion batteries by 2012. Daimler may have the finances and experience to produce cleaner vehicles but the Tesla equity stake expedites the process.
While Daimler benefits from Tesla’s proven EV technology, the EV manufacturer can advance the ball in terms of operational capacity and research. Tesla has access to increased funds from Daimler that will be used for research and production of the upcoming Model S. The Model S will feature a lower sticker price than the Tesla Roadster in part because of increased efficiency in the production process. The $30,000 price tag for Tesla’s existing drive system will be reduced drastically with help from Daimler’s substantial production facilities. The Tesla-Daimler partnership stands to increase the number of EVs, hybrids and fuel-cell vehicles produced in the next decade worldwide.
Tesla Motors Inc. is hoping that Daimler’s investment will clear the way for a $450 million grant from the U.S. Department of Energy. The $450 million grant would be used for an EV components factory ($100 million) and an assembly plant ($350 million) in California. The federal government’s commitment to cleaner auto technology should have made Tesla’s grant proposal all but certain. Daimler may have put Tesla over the top with its commitment of millions in the burgeoning EV maker.
