Shock: Daimler Inks Deal With Tesla, Takes 10% Stake

Who was expecting this? We already knew that Tesla and Daimler had collaborated on supplying an electric drivetrain for a run of electric Smarts. Beyond that, Daimler refused to offer any signs of a deeper collaboration. Tesla's CEO Elon Musk seemed particularly excited about the deal, but I just suspected that was due to the press factor of a major automaker coming to Tesla for powertrain technology. Now it appears something deeper was in the works all along.

I think this deal is pretty amazing! Daimler and Tesla seem like a perfect fit. Daimler produced the first automobile and now it's being a part of it's electrification. In the press conference, the head of R&D at Mercedes, Dr. Thomas Weber, praised Tesla on it's know how and for it's success in bringing the Roadster to market.

That success and it's ability to bring projects to market "quickly" is what led Daimler to pick Tesla. He said that spirit of lean management will help both companies.

The new partnership includes Tesla supplying battery packs for a full run of volume Smart EVs, with volumes in the "five digits", the the two working together on developing battery technology and Mercedes providing hardware to Tesla. Mercedes believes the future of the automobile is electrification. Wow! Do you know what this means?

Even if no money was involved, this would be huge. Tesla gets to tap into the economies of scale that Mercedes has, as well as it's expertise in other areas. A Model S based off of the E-Class platform? That could be a very real possibility.

Brilliant move, Daimler now has a vested stake in seeing Tesla succeed. They have bought a 10% stake in the company. The company will only say that it bought a stake in the "double digits" but sources say Daimler paid $50 million for it. That is a big infusion of capital for Tesla, and should go a long way towards helping the company get government help.

In addition, look for a BIG jump in orders for the Model S and probably even the Roadster. For both companies this is an excellent move. Daimler gets EV expertise, Tesla gets an infusion of capital and engineering/development help from one of the best. This is huge! The Model S just got a whole lot closer to production reality.