By on May 19, 2009

According to Forbes, German automaker Daimler has purchased a 10 percent stake in Silicon Valley’s EV sweetheart, Tesla Motors. “The two companies are already working together on using Tesla’s lithium-ion battery packs and charging electronics in Daimler’s electric version of its two-seat Smart car. The stake’s value was not disclosed, but [Daimler’s R&D meister Thomas] Weber said it was in the double-digit millions.” Don’t you just love it when German managers go all coy about their American acquisitions, like, say, when Daimler bought Chrysler? Of course, we mustn’t forget Musk. Announcing the news, Elon did what he does best: pile on the hype. “Tesla Chief Executive Elon Musk said in a statement that the partnership would help it bring the Tesla Model S car to production faster and ‘ensure that it is a superlative vehicle on all levels.'” Excuse me? Other than providing cash for battery packs for the Smart, where’s the bit about Mercedes helping Tesla develop the Model S? Oh maybe it’s something to do with this . . .

As part of the deal, Daimler vice president Herbert Kohler will take a seat on Tesla’s board of directors.

See? Now that’s funny. Can you imagine?

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14 Comments on “Daimler Buys 10% of Tesla...”


  • avatar
    Juniper

    Saw a Tesla on the street for the first time Sat. evening. We thought it was a Lotus until we saw his license plate and then realized it was silent.

  • avatar
    fallout11

    Wow, that is funny!

    Daimler did so well with its last ‘investment’ in a NA car company (Chrysler), can’t help but wonder how this marriage is going to turn out.

  • avatar
    Strippo

    I see where this is going. When Tesla finally goes belly up, Musk can say that “Daimler ‘Chryslered’ us. Those bastards!”

    Just brilliant.

  • avatar
    MrDot

    Beware of Germans bearing gifts?

  • avatar
    tced2

    Maybe Diamler can do better with a company that makes $100k autos (Tesla) than with one that makes $25k autos (Chrysler). Of course its debatable that Diamler makes good cars. At Diamler prices they should be superior cars.

  • avatar
    the duke

    Now guys, let’s give credit where it’s due. Why would Daimler not want to own another small “game-changing” car company, as the Smart venture has set record profits for the company every year of its existence. Oh wait. Never mind.

  • avatar
    tony-e30

    So does this mean that the Tesla Model S will ride on the last generation E-Class chassis for the next 15 years?

  • avatar
    TireGuy

    Why can everything in the automotive industry be seen only negative?
    Alternative methods for propulsion of cars are being discussed and elaborated, the electric vehicle being one of them. This has to do with business plans, but also just with the way to show the customer that in fact Daimler is engaging in environmentally friendly cars. Having the chance to use the Tesla development in the Smart helps in this. How much do car companies spend on advertising? How much is it then worth to be able to say that Daimler owns part of Tesla?

  • avatar
    Robert Schwartz

    A fool and his money.

  • avatar

    I would give this a chance. Large, bureaucratic companies like Daimler and Chrysler are just about impossible to merge and Daimler is far from the only company that has tried and failed. An alliance to share technology with Tesla is far easier to manage than that.

    Daimler is a company with genuinely great platform engineers and Tesla probably needs a lot more of them than it has. They also have an excellent dealer network that could be used to sell Teslas.

    Come to think of it, the current Model S looks a lot like a CLS. I was almost thinking it could be based on that platform, whose excellence has already been noted by TTAC reviewers. Too bad about the $70k price.

    If the Model S was made in Germany by Daimler, and was a mildly disguised CLS, I think it would sell incredibly well, probably far better than Tesla could do on its own. And they wouldn’t need to fund an incredibly expensive factory and might even be able to dispense with that infamous government loan.

    The only catch is that it’s most likely back to being a $95k+ car, which might make changing the world a tad difficult …

    D

  • avatar
    JEM

    So Elon chased everyone away from Tesla who knew anything about production engineering a car, and now Daimler-Benz is going to save his butt?

    I’d be very surprised if DB went into this deal without some substantial protections in the agreement and more control over the operation than a 10% stake would indicate.

  • avatar
    carguy

    Tesla is run like a silicon valley startup software company: Load of hype, funded by VC cash and customer deposits but very little in the way of product, a product maintenance plan or profit.

    Maybe the Daimler deal is a good (or desperate?) move as they certainly do need all the engineering expertise they can get. The Lotus engine swap took them years while Fisker and RUF seem to have done similar projects in months. But who knows, maybe Daimler is just wanted to get in on the hype?

  • avatar
    Samuel L. Bronkowitz

    Tesla is run like a silicon valley startup software company: Load of hype, funded by VC cash and customer deposits but very little in the way of product, a product maintenance plan or profit.

    Well said. And, like most software start-ups that are absorbed by big companies, the resulting “synergies” never happen. The bureaucracy of the big company crushes whatever was good about the small company. The good people figure it out and leave early. Those that have a “stake” stay around until they satisfy their contract and then they leave. I’ve been through it twice and it was so easy to predict both times.

    I predict epic fail.

  • avatar
    guyincognito

    Ok, I’m a major critic of Tesla and Elon, but this is huge. With the backing, ie. cash, of Mercedes and a platform and engineering help, I believe they could produce the Model S. I still doubt it will be profitable at the price point Elon claims or that it will live up to his performance targets, but this news has me at least believing it may exist.

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