Daimler AG has a new electric vehicle partnership in the works, and it could represent a critical deal for startup Tesla Motors — for better or worse. The Germany-based automaker and the Silicon Valley electric sports car startup joined forces last year with an agreement for […]

Daimler AG has a new electric vehicle partnership in the works, and it could represent a critical deal for startup Tesla Motors — for better or worse. The Germany-based automaker and the Silicon Valley electric sports car startup joined forces last year with an agreement for Tesla to supply battery packs for a small trial of 150 electric Smart ForTwo cars in Berlin, a project later expanded to 1,000 vehicles and a big coup for Tesla. As we’ve noted before, the deal meant Tesla succeeded in getting its foot in the door with a major automaker — but not necessarily reliable income for the powertrain supply unit that Tesla has made a core piece of its business model.

Daimler said today that it plans to announce a “new strategic cooperation to make electro mobility a reality” tomorrow morning in a presentation with “a key executive of [Daimler's] strategic partner.” Thomas Weber, a member of Daimler’s board of management who is responsible for Group Research & Mercedes-Benz Cars Development (Smart is part of Mercedes-Benz Cars), will deliver the announcement from Stuttgart, Germany. As a Daimler spokesperson told us today, the company is “determined” not to reveal any more than that.

We don’t yet know the nature of this partnership or who is involved (we will update when we do). Depending on what Daimler really has in the works — a battery deal, an infrastructure partnership, or something else — there’s potential for it to cast a shadow on any hopes for a larger deal between Tesla and Daimler. On the other hand, an expanded deal for Tesla could provide a nice boost and industry cred for the startup as it lingers in limbo for Department of Energy funds.

Last week, a video posted on YouTube featured a Tesla investor claiming that big news about strategic investments in the company would come out in the next few days and give people confidence that the Model S electric sedan concept will reach commercial production — something that Tesla hopes to fund with those still-pending DOE loan guarantees. We wouldn’t expect Daimler to provide the hundreds of millions of dollars Tesla needs to get Model S manufacturing off the ground (last fall, Tesla CEO Elon Musk told us that the deal with Daimler would not focus on the Model S), but revenue from a separate agreement with Daimler could potentially help the company’s bottom line.

Like with Tesla, an EV charging startup could gain momentum from a deal with Daimler. But the automaker’s new “electro mobility” partner won’t be Shai Agassi’s Better Place. While Daimler has held “talks” with Better Place, the Palo Alto, Calif.-based infrastructure startup confirmed with us today that it is not involved with tomorrow’s announcement.

Daimler has given every indication that it intends to build batteries in-house, setting up a joint venture late last year to develop lithium-ion batteries in partnership with Evonik. In March Daimler unveiled plans to bring a second battery developer into the Evonik JV, and announced that it would invest $9.9 million in a new R&D center for vehicle propulsion systems in Michigan.

So the automaker has enough pots brewing in the EV space that Tesla may have nothing — or everything — to do with tomorrow’s announcement. Either way, big automakers’ partnerships for electric car development tend to be interesting. We’ll keep you posted as more details come in.

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  1. Mari Lynch Dehmler Monday, May 18, 2009

    Since first setting eyes on a Tesla, at the Concours d’Elegance in Pebble Beach, I’ve rooted for this company and the day when their EVs would be affordable for more drivers. I’d love to see Tesla become a US-based battery leader too. A battery doesn’t add to the sexiness of the Tesla Roadster, or to the visual appeal of the less costly though attractive Model S; but if “energy is everything” when it comes to sex appeal, it’s certainly true with EVs and the likelihood of their imminent widespread use.

    Andy Grove, co-founder and former CEO of Intel, suggested in the 4/27/09 issue of Fortune some answers to the battery challenge. As Grove notes–and in contrast to the sharp focus of Wang Chuan-Fu, CEO of China’s BYD electric car company (see “Buffett Takes Charge,” also in 4/27 Fortune)–the US is presently not even playing in the battery technology game.

    Grove thinks a temporary government-owned foundry organization would help get US battery production off the ground, similar to government help in the early days of the microprocessor. He also wants wants US Energy Secretary Steven Chu to set up an industry council “and run it as if we were under wartime pressure. If Chu listens to Bill McKibben and others, indeed we are.

  2. Nothing or everything? Well, these days Li-on car battery business is still risky and the more customers the better. Even Buffet’s invested in car battery maker which indicate it might be good bet. Sharing the risk is always safer, not to mention the crisis time.

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  4. Tesla, Daimler Team Up for Smart Batteries, Daimler Takes 10 Percent Stake Tuesday, May 19, 2009

    [...] million dollar sum for about a 10 percent stake” in Tesla Motors as part of a new strategic partnership between the German automaker and the Silicon Valley electric sports car startup. Speaking at a [...]

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