When Tesla Motors CEO Elon Musk told us yesterday that his company would be supplying battery packs and chargers for the first 1,000 second generation electric Smarts he expressed hope that the deal might be expanded beyond that. He told us that if the test program went well, he would like to supply packs and other components on an ongoing basis to Daimler. That may still happen, but the odds are likely against it. For one thing, most of Daimler's production is in Europe and Tesla packs are assembled in California, making the logistics of overseas shipping expensive.
The bigger problem is Daimler's desire to keep battery technology in-house. This is not unique to Daimler; Toyota, Honda, Mitsubishi, and Nissan all have joint ventures for lithium ion batteries. At the Detroit Auto Show this week, GM announced that it will assemble the packs for it's ER-EVs in its own factory with its own battery management systems. Matthias Brock, Head of Media Relations for Daimler's Research, Development and Environmental Communications told Green Car Congress that the Tesla deal, "helps us to bridge the time until the industrialization of Lithium-Ion batteries within our Joint Venture with Evonik will be ready." That JV was announced in December.