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article imageDaimler buys 10 percent stake in Tesla

By Bob Ewing     May 19, 2009 in Business
The German carmaker Daimler AG has purchased a 10 percent stake in the electric car maker Tesla Motors Inc. The deal expands Daimler's access to Tesla lithium-ion battery technology.
Daimler is making electric versions of its popular two-person smart car.
Daimler has put Herbert Kohler on Tesla’s board of directors.
Tesla was started by Elon Musk and has been looking for money. In 2008, it gave up plans to build a new head office and factory in San Jose.
The company is still waiting for some $350 million in loans from the U.S. government to pay for a new factory, probably in Southern California.
The recession and low gas prices have made it difficult for Tesla to sell cars. The only product the company is offering is a $109,000 sportscar, which has been pooh-poohed by some critics as just a showy, expensive toy well out of reach of the average driver. As of mid-April, it had delivered 330 of the sportscars.
In April, Tesla reported it had taken 711 reservations, at $5,000 each, for its four door sedan model, due out in late 2011, though Musk said this boost from Daimler might speed that up. Although that adds up to some $3.5 million for the business, those $5,000 reservation fees are refundable.
"Our strategic partnership is an important step to accelerate the commercialization of electric drives globally," said Dr. Thomas Weber, a Daimler AG board member who is responsible for group research and Mercedes-Benz cars development.
"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.''
Said Tesla Chairman and CEO Elon Musk: "It is an honor and a powerful endorsement of our technology that Daimler would choose to invest in and partner with Tesla.''
Daimler is testing 100 of its electric smart cars in London right now and its factory in Hambach, France, will start making up to 1,000 of the electric smart cars later this year.
There is battery-powered Mercedes due out next year.
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