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 $450 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.
But as I suggested a year ago, 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. In a TechCrunch poll I inserted into that post (and again below), 77 percent of you agreed. 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.”)
Selling electric batteries to other car manufacturers…IMO
No doubt, Tesla should open a chance of selling to both customers, either electric vehicles or car manufactures. From the market demand, Tesla can learn further and decide which customer they have to prioritize.
The value of the original Telsa will skyrocket
As long as there are batteries are available, then yes.
good point
The future is Hydrogen, battery powered makes no sense going forward. Sorry Daimler and Tesla
We’re also limited to space travel by lightyears, but that will change one day too. For now we move forward with what we have.. Sorry Jackie
Hydrogen cells are some kind of battery too… so I think tesla is good for mileage/Ah and torque. The conventional batteries will become obsolete but hydrogen+tesla drive train=future cars
The big auto makers are a tough crowd once they see you as a threat to their bottom line. Licensing their technology to a major automaker or two would give them the protective buffer they will need.
their electric drive train actually sucks.. the batteries is what’s good. But technically Tesla is just not cream of the crop.
Granted they do have the first vehicles on the road but technically they are in the stone age.. there are much better companies out there.. IN CALIFORNIA.
They won’t use the drivetrain of Tesla, because it sucks. Besides there are announcements on the horizon.. that will make tesla drive train even more obsolete.
I keep being amazed how far they make it and how they keep limping along… then again Daimler does not have a history of fruitful partnerships or picking the right partners…from that point of view it is not surprising…
Noobssss, your post made my eyes bleed, seriously. Did you graduate High School?
Hey, Mister. Don’t be so judgmental. Readers here are free to express their opinions the way they want. Make your own blog if you want to get perfect people to comment there. Don’t forget your grandma in her bed.
Those in the know will tell you the same thing. Just ask anyone in the industry.
Oh and the batteries.. the last thing I knew is that they were using a123 systems batteries.. so not quite sure if they just re-branded those to tesla batteries and are selling them as theirs… or whether came up with an entirely new system. I’d be very very surprised if it were the later… so the thing they are actually reselling is most likely someone else’s tech (repackaged), plus their experience of having cars on the road. Otherwise I remain with my statement that technically Tesla is not cream of the crop and cutting edge what most people believe.
Just give it a year or two and you’ll see. Unless they change a few things they’ll be another bookmark in the history of revolutions that over rolled it’s creators….
noobssss has a great point in his last sentence. Remember Daimler Chrysler? At least Daimler came to their senses and dumped Chrysler.
Benz partnered with Tesla for batteries not the technology. If European car companies started buying automobile technology , it is shame on them.
So essentially they like the battery not the car.
Does it say something about the future of the car ?
Tesla could also make use of Daimler’s distribution network
Good news!
I am not sure why there is so much negativity about Tesla motors and what they trying to do. Why is everyone waiting for it fail? Why can’t we cheer them and see if they can succeed to eventually release the $20K mass production car. As far as I understand that is their main goal…to eventually build an affordable electric car and also proliferate mass adoption of EVs. Through partnership with Daimler and many more to come in future, may be, that is what I think they are trying to do.
All this negativity just reminds me of a quote from Albert Einstein: “Great spirits have always encountered violent opposition from mediocre minds”.
If you can’t be part of the solution don’t be part of the problem!
I am not against tesla… but against hype. I hate hype curves and crashes, because it kills entire industries. T$ has a history of following press releases and hype curves… and tesla is on that trajectory… all it would take is a phone call or two…. and in return the companies worth following are ignored…. and along with their technology…
Is this hype: “Tesla is the only production automaker selling a highway capable electric vehicle in North America and Europe.”
I think the real problem is that Tesla may be able to come up with a $20-25k design but not actually be able to mass produce it. The problem that I keep seeing when I research Tesla is that they can’t compete on the scale necessary to be a major player. While I would LOVE to see the Tesla badge become a major brand in the US – I’m fearful that they simply don’t have the manufacturing and support infrastructure in the United States in order to make that a reality.
Unfortunately this deal gives them money at the expense of some of the exclusivity that would have allowed them to be unique in the space. Tesla isn’t well positioned to compete with the big boys, but if they can find a sugar daddy with a dealership and support infrastructure they may be able to ride this one out and get purchased by one of the major brands that does.
The car is more than its parts. Tesla has a LONG way to go.
In terms of scalability, it’s true – Tesla might do better specializing in the electric drive train and let other companies do the work in terms of designing the chassis and the body of the car. But ultimately I think they needed to develop both the Roadster and the Model S to show that electric cars don’t have to be boxes on wheels that go a maximum of 30 MPH. Not to mention, while the Roadster is eye catching, the Model S really shows that electric cars can be beautiful luxury vehicles, along the lines of any Mercedes-Benz. It was pretty fun to see it in person, that’s for sure: http://greenhom...iling#post_7657
The LA Times reporter actually claimed that Daimler was getting “Tesla’s advanced batteries” in the deal. Tesla doesn’t HAVE any batteries, advanced or otherwise. This is a perfect example of the media’s inability to cover technology stories. Tesla’s batteries are obsolete 1st generation small format batteries made for laptops, not cars. Do you really think any professional automaker is goiing to build a car and put 8712 batteries inside? It’s funny watching the media screw up every electric car story they try to cover. And then read the brainless bloggers who know even less. Dan Gill, for example, thinks that only Tesla is showing EVS to not be 30 MPH restriicted show boxes. Where has Dan been the past year – the Chevy Volt, Opel Ampera, Cadillac Converj and Fisker Karma are every single one far superior to the Tesla roadster and actually can take you where you want to go, something the 110 mile radius Tesla cannot do, even with its $30,000 battery pack that needs replacement every 5 years.
i want to see how “the Chevy Volt, Opel Ampera, Cadillac Converj and Fisker Karma… actually can take you where you want to go.” None are available, that’s the point. It’s not perfect but Tesla has actually commercialized something. when all of these are selling v1.0 Tesla will be on 2.0
Wow glad to see some people with brains who actually have a clue about tesla. They use a123 batteries.. and I seriously wonder why Daimler would want to pay a middleman… the only thing tesla has worth a dime is the feedback of having real electric cars on the road. that’s the only thing that’s worth a dime. Forget everything else.
Kerry & noobsss, you all might want to disclose your conflicts here. Your comments do not make sense otherwise.
How can you speak on misinformation when you spread it yourself? The roadster gets well over 110 miles on a charge – did it not recently make headlines doing something in the order of 274 in a race?
Not to mention the karma and the volt are NOT pure electric, they’re hybrids.
It sounds like you guys are backing a company that you have a stake in and are upset that the company that you feel is superior is not getting the attention you feel it deserves. That’s all well and good, but don’t go spreading lies just to make it happen.
I’d also like to add that the battery pack is currently rated for 10 year life span, would cost ~30k to replace NOW, but only 12k by prepaying.
Again, stop crapping on the media outlets’ fact-checking when you can’t seem to (or don’t want to) do it yourself.
great news E-Class becomes Electric Class
This is a major step for Tesla, especially since the new Daimler management is not as crazy for M&A deals as the previous one (the ‘leaders’ who got the DaimlerChrysler deal together to ‘take over’ the world). I’ve done consulting work for Daimler in Germany and North America for almost ten years and they are definitely a good partner fro Tesla (especially now that they can focus again on their core business on making quality cars).
It shows that Tesla has something to offer that a mayor automotive technology leader can’t come up with themselves – at least not without significant pain.
I think they got oversold… and blinded by American Sales Magic…. this partnership won’t go anywhere… just another chrysler disaster just on a much smaller scale
Tesla was working with Better Place. If this is the case, why would they just sell batteries? Isn’t Tesla’s core competency their design & performance. Wouldn’t Tesla be handling R&D and Daimler be the manufacturer?
Daimler’s action is not such a difficult concept, folks. If they just wanted batteries, they buy them from Tesla. The company has invested in Tesla because they want a piece of the action (i.e., ROI), they want in on the IP/technology, and they are mitigating their their risk in the future by diversifying their portfolio.
I think all it is, is a publicity stunt… they have to show green… they don’t have much to show for.. so this gives them some green-cred.
The main problem is cultural. The Germans haven’t figured out yet that the Americans are much better at selling themselves and hyping themselves up. That happened with Chrysler. When they actually took a look at the mess they realized it.
I think that deal is just more of the same… except it will just fizzle out.. and not go anywhere… mark my words….
if they have an electric mercedz, imma buy instantly.
Question, what is the additional cost to your electric bill for these cars? obviously it is great that they do not require gas but how much does the electricity cost?
The question has no meaning – Tesla, the company, will be owned by so many other companies in 5 years that the question will be meaningless.
Let’s hope Daimler doesn’t “do” for Tesla what it did for Chrysler.
Isn’t this what that guy in the leaked video was referring to with his cryptic phone call. Its a good move for Tesla, which hey as much as people don’t like Elon Musk we owe where this whole elctric car movement is to them and (lets hope he doesn’t screw it up) him.
Before Tesla the oil industry firmly had their boot on the throat of automakers preventing this scenario from happening. EV1, really need I say more.
Hopefully Fisker will be able to prove that a well engineered product doesn’t require a $500M investment to at least go beyond the drawing table.
I personally can’t wait to say goodbye to gas pumps. I’m also looking forward to all electric motorcycles. I know some are scooting around, but who wouldn’t want a GSX-R EV?
Daimler is the first car maker to successfully adapt lithium-ion technology – currently used predominantly in consumer electronics as noted above.
Daimler AG holds at least 25 patents that facilitated the breakthrough in this technology. A crucial element in the company’s success was its integration of a lithium-ion battery into the vehicle’s air-conditioning circuit; the Mercedes-Benz S 400 BlueHYBRID.
The deal with Tesla is another step in the right direction.
Daimler is our German No. 1 still leading german engineering. Another step could be the use of fuel cells from http://www.elcomax.com
A Fuel Cell elec. combination is likely according to http://www.clea...tech-europe.com
There’s always something going on in the auto industry
I hope there’s energy that can fully replace oil all over the world for auto in the future. So we can goodbye to the hike of oil price.
Besides that, it’s better for our environment.
Daimler also worked with Chrysler and that deal turned out well.
which is cleaner? (carbon footprint)
a) burning enough coal to produce enough charge equivalent of 1 gallon of gasoline
OR
b) 1 gallon of gasoline?
Energy created in very large plants it _MUCH_ cleaner than energy created in little gas engines. Duh.
Wow, congrats to Tesla. Can’t wait to see some of those cars rolled out in ‘10.
good news…thats the future