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Daimler Takes Ownership Stake in Tesla's Smart Batteries

Big news came in the auto industry yesterday, concerning an established leader and a young upstart.  Daimler will now use battery packs from Tesla for the electric Smart cars slated to launch commercially in 2012.  This coup for the small start-up electrical car manufacturer allows it to find a reliable "senior" partner/ purchaser of its' technology while providing to matching funds provided under the stimulus program.  Daimler also now possesses a reliable partner in the burgeoning battery field which is crucial to the next generation of electrical and hybrid cars.   Also, an agreement to share knowledge of future battery technology was reached while Daimler will take a ten percent share of Tesla and a seat at their board of directors.

This decision by Daimler seems to be a serious endorsement for Tesla from the German company.  This nod is even more important to Tesla because they have now entered the running for other models, although Daimler insists this announcement should not be extended to other future models, only the 2012 Smart EV.  The big loser today is Evonik, another battery maker, whose joint venture with Daimler seems to be falling into question by investors.  This is especially true since their batteries were passed up by Daimler for the Smart EV.

The biggest winner is of course Tesla.  Not only does the company now have a great client but also access to Daimler's extensive testing data.  At the same time this new car company will now gain name recognition in Europe, an area that this start-up hopes to crack.