• May 19, 2009


In just a few minutes, Daimler will be starting a press conference with Dr. Thomas Weber, the head of R&D for Mercedes-Benz. Dr. Weber will be making an announcement about a new strategic partnership for electric vehicles. Most of the speculation at this point involves a possible investment in Tesla Motors. The startup is already supplying batteries and charging systems for the second generation Smart ED.

655am: We're just waiting for Dr. Weber to come to the podium

658am: It is Tesla. They just flashed a slide up on the screen with the daimler and Tesla logos.

705am: Still waiting for the start of the press conference, wondering if Musk will join Weber at the podium

706am Now beginning.



continue after the jump. 708am: the press conference is coming from the Mercedes museusm and Musk is sitting next to Weber

709am: Elon is speaking now, thanks Daimler for investing in Tesla, no details yet

710am: Weber takes the podium Talks about combining best of old and new school

712am: optimizing current ICE engines, adding hybrid and finally going ZEV. Convinced electrification is the future. Mercedes has been testing EV since early 70s with battery powered vans.

714am: Praises Tesla for bringing an "extraordinary" electric roadster to market quickly. Weber believes this spirit of lean management will enhance both companies. MB chose Tesla battery for Smart ED because they could the project quickly.

715am: Volume electric Smart coming in 2012 with LiTec batteries. Two companies will collaborate on developing batteries and Mercedes will supply hardware to Tesla for its vehicles.

716am: Speed and time to market is critical and partnerships make this happen.

Daimler will also invest in other partners for motors and other components, Daimler is taking modular approach to electrification.

Starting off the Q&A, Daimler reveals it paid a double digit million dollar sum for a 10 percent stake in Tesla with future options for more.

Daimler and Tesla will collaborate on future models including possibly the Model S which may get some Mercedes parts.

Weber and Musk both emphasize that weight reduction is a major emphasis for the future. Weber says its time to reinvent the automobile.

The next step for Mercedes is an electrified Smart to widen that lineup. Musk says it definitely possible to have a Smart that goes "like a bat out of hell." Deal includes both companies sharing knowledge on future oriented vehicles.

Priority with Tesla is to speed up processes to bring EVs to market, Weber believes small cars like Smart are the place to start while Tesla has shown it can be done with sporty cars

Musk says Daimler provides engineering expertise for mass production while Tesla provides expertise in batteries and electric drive

Weber says that the electric drive systems will be applied to all types of vehicles including urban commercial vehicles.

Commitment is to start with Tesla's current lithium cobalt oxide batteries. Moving ahead they will look at "common interest" and LiTec (Daimler's battey JV with Evonik). This will help reduce costs to bring batteries to mass market. Priority is safety, high energy content and affordabiity.

Musk explaining that Tesla works on the battery packs and is not commited to a specific cell type. That is the electromechanical problem of integrating cells, electronics etc. Tesla is agnostic to cell types and is open to using LiTec cells.

Weber believes they have the best cell on the market with the LiTec cells.

Weber responds to question about fuel cells, reiterates that MB's electric concept is best on modularity allowing them to use common motors, electronics, batteries and other components regardless of whether they are BEV or FCEV.

Volume production with 5 digit plus volumes starting in 2012.

Musk responding to question about the number of cells in the battery pack, says the current plan is to use the laptop cells for the model S with up to 8,000 cells. However, they may switch to a different cell design that would only use 1/4 of the cells or less

Weber says, Daimler will get one board seat at Tesla and Mercedes head of E-Drive systems will work with Tesla starting right away.

Musk says the share price paid by Daimler is less than what they could have gotten from a financial investor, but Daimler's engineering expertise had more value.

That's all for now.


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  • 38 Comments
      • 5 Years Ago
      Yes! Electric smarts! Now if only my twenty year old Benz can last another three years...
      • 5 Years Ago
      That's absolutely astonishing for a car company born in 2003 ! It's a good match with Benz !
      • 5 Years Ago
      I've heard the amount of energy required by to power electric cars is greater than the amount of energy required for gas cars. Hybrids seem to solve this dilemna. Why is anyone still pursuing electric cars?
        • 5 Years Ago
        Looks like Markus got hit by that "left arrow" bug. Using certain characters causes the post to be truncated at that point. I think what he was trying to say was that electric motors are over 90% efficient, but that internal combustion engines are under 20% efficient.

        Yes, there is some energy lost in generating and transmitting electricity, but there is also energy lost in pumping up petroleum, shipping it, refining it, shipping the refined fuel to the station, then pumping it into the gas tank. EV opponents often make that mistaken claim, basically comparing "well to wheel" efficiency of an EV to the "tank to wheel" efficiency of an ICE vehicle.

        Fact is, fossil fueled power plants use efficiency boosting devices too large to use on vehicles, they typically get an efficiency of 40% up to 60%. Distribution is typically 90% to 98% efficient, depending on distance, charger and batteries about 85%, motor and drive train over 90% efficient, the worst case overall efficiency is 27%, which is better than the IC engine alone in a gasser! Add in all the other energy wasting steps of pumping, shipping and refining the fuel, and the discrepancy only gets worse.
        • 5 Years Ago
        Thanks for the explanation. I thought electric transmission was much less efficent. I never heard about the low efficiency of an IC engine.

        I'd be interested in learning the detailed calculations for this. Do you have a recommended source?

        Thanks again
        • 5 Years Ago
        Bob,

        What you "heard" is completely wrong and makes absolutely no sense from the standpoint of pure physics.

        1) Electric motors have an implicit energy efficiency of >90%, while gasoline engines hover at
        • 5 Years Ago
        Thanks for the partial comment Markus.

        I think you would have to generate the electricity and then transmit it to the device for the car to plug into. Isn't there significant energy lost in any such transmission even before the energy is transferred into a battery for the "90% efficent" electric motor? I think that is why Dr. Bill Wattenburg, PhD in Nuclear Physics made this claim but I am not certain. Of course, it also consumes energy for a tanker to deliver gasoline to service stations. So, I don't imagine the correct calculation is simple or trivial. But it seems that this would be at the very core of discussions regarding alternative energy for vehicles.

        I was hoping for a more thoughtful response than what you offered. Maybe someone who knows the details of this comparison can help?
        • 5 Years Ago
        Tesla had a white paper that described in detail the well-to-wheel efficiency comparison here: http://www.teslamotors.com/display_data/twentyfirstcenturycar.pdf but they're in the process of updating it so there's nothing to see. For now, you can read the conclusions here: http://www.teslamotors.com/efficiency/well_to_wheel.php

        This is also interesting, as alot of it applies to any electric car: http://www.teslamotors.com/efficiency/how_it_works.php
      • 5 Years Ago
      The American government held back from giving the 450 million loan to Tesla for too long. Is this a conspiricy in the American government. Now a well known gas guzzler company with Arab (read oil) owners have bought an electric car company. Do they want to kill it. Do they want to add a gasoline engine to it??
      The American government should have just given the money to tesla. They were giving billions of dollars to the gas guzzler companies but not one dime to the electric car companies. This is indeed a major conspiracy may go down in history.
      It is highly unlikely that Daimler will just build a new factory for building a completely electric car.
      • 5 Years Ago
      So this is the end game for Musk, well played. Daimler will buy the rest of Tesla in a few years and Elon can move on to his electric plane. If the Model S uses the old E series platform, I doubt they will be able to meet their $57,500 price point.
        • 5 Years Ago
        Jake, you also have to factor in a new plant to build the car. If Musk is serious about building in Cali, tack on another 10K. Also, the 300 platform was a midified E series platform from 2 model generations ago, so the platform is going on 10 years old and it is heavy. I would think weight (lack of) will be critical to the success of this car.
        • 5 Years Ago
        The Dodge Charger & Chrysler 300 based on the same E-class platform starts at roughly $25k, so it's not that expensive a platform (though I realize volume plays a big part). How close to the $57k they get will depend on how low the cell prices go by the time they make the car. Right now they have been quoted a Roadster battery pack replacement price of $30-36k (unknown how much, if any, margins they make on this price), if you factor in the smaller size of the Model S pack, that's a $24-29k replacement price. Assuming the ~5% annual reduction trend they project is true, that's $21-26k in 2011.
        So they have $6-11k to use for luxury, accounting for lower volumes, and differences in powertrain costs. Not a very safe margin depending on how much margin they make on the replacement packs. I anticipate a price increase like they did on the Roadster and like Fisker did on the Karma.
      • 5 Years Ago
      this was not a majority stake as far as i am concerned, and come on Musk wouldn't let that happen in a million years. i think this will be very very good and Daimler knows that by working with tesla it can get its electrics on the road faster and capture the initial electric push. tesla needs help in mass production and it would not be far to say that possible use of Daimlers distribution network. there will be competition between the two eventually, maybe but that is a long way off. great news, very exciting!!
        • 5 Years Ago
        Usually agreements like this include stipulations as to how they are going to divide up market segments so they minimize competing overlap. Daimler might have agreed to only release electric vehicles outside the US or to concentrate on launching a lineup of smaller EVs to begin with.

        The market for a well made affordable EVs is larger than both of these companies can handle so competition wont be much of a factor for a few years.
      • 5 Years Ago
      Wait a minute. So much for Elon announcing a plant in California (when the Guv himself flew into San Fran to pat the little guy on the head for keeping mfg in the state), now he sells out to an overseas OEM and will tell the world he had no choice and the plant and jobs would NOT be coming to CA. Tesla is starting to act too much like ZAP - make up stories to get the press and attention, then backtrack to cover yourself. Is there a truthful EV company out there??? anywhere???
        • 5 Years Ago
        A majority stake would be to sell out. And as others said, I don't think Elon will do that anytime soon because of how much money he has put into the company.

        Right now this partnership does have very good upsides for Tesla. It solidifies Daimler and Tesla's cooperation on the Smart EV. It also provides Tesla a pathway to cheap prices on newer battery cells via Daimler's deal with Evonik, and it also allows Tesla to tap into Daimler parts and possibly a chassis for the Model S.
        • 5 Years Ago
        Exactly my point. Musk raised a lot of hope and expectations with that announcement last July. Those of us in the industry knew he'd never keep his word, it made no sense. It was just more smoke, mirrors, attention for Elon. Suffice it to say, nobody believes anything he says anymore.
        • 5 Years Ago
        Don't be silly. What business owner in their right mind would do new, major mfg in CA? The states gouges every man, woman, child, alien, animal... etc for taxes. Look at all the silicon valley fabs...... GONE. The state of CA has serious financial problems and tries to make up for it by reaching deeper into our pockets. Being a resident here I would like to see the plant here, but it doesn't seem realistic from Musk's point of view.
        • 5 Years Ago
        Jules: Tesla has not yet announced any change from the plan to open a plant in California. That could change, of course, as we remember the original plan to build in Albequerque got canceled.

        However, there are certain advantages to setting up manufacturing in California. It has a highly educated workforce and it is where their biggest base of customers are located. Real estate prices are way down at the moment. And of course, that is where their headquarters are located.
      • 5 Years Ago
      This could either be very good (mercedes going full electric in the midterm, tesla surviving) or very bad (tesla gets eaten by monopolists and shelved as the mainstream offers hybrids which are just as expensive, require more maintenance at more cost and are more unreliable with a higher TCO).

      If they are using common sense they will foster tesla and electrics and go after the long term market, if they are just mindlessly following the money we are up shit creek.

      Fingers crossed on this one.
        • 5 Years Ago
        RE: "tesla gets eaten by monopolists and shelved as the mainstream offers hybrids which are just as expensive"

        I don't think this will happen because Daimler only purchased 10% interest, not enough to derail Tesla from that perspective. On top of that, there are a number of other companies out there working on fully electric vehicles (as well as nearly electric vehicles like the volt) so simply stopping one small manufacturer wouldn't appreciably change the landscape. Electric vehicles are coming no matter what happens with this deal. I think the intent here is to get as much technical experience as possible on the part of Daimler, and to get as much manufacturing support as possible on the part of Tesla.
      • 5 Years Ago
      This is awesome. Let's hope this means the Model S will be on the way, followed by a C-Class level electric family sedan. And electric smarts, please god, electric smarts for the people!
        • 5 Years Ago
        DF,

        You are an idiot and a racist. Your arguments against the Germans were once used in Germany - against the "Rubensteins" and "Goldbergs"... and we all know where that led.

        Racists and nationalists are assholes - everywhere.
        • 5 Years Ago
        DF - What? Did that rant really fit this news?
        • 5 Years Ago
        Another sad day for the US business community and another small nail in the coffin of the US economy. I believe that the American people it is basically good people and that is why these “liebenborn” look alike take advantage and abuse you and your country. These “boers” and “bosches” are sucking you dry. As someone said in the other day, you do not need to look for the anti-American crowd anywhere else but inside the US.
      • 5 Years Ago
      @Jules, actually Tesla isn't "selling out" to Daimler, they are simply letting Daimler invest in Tesla. While a 10% stake in a company is nothing to sneeze at, neither is the fact that it cost Daimler "a double digit million dollar sum".

      Assuming Tesla got exactly $10 million from Daimler that would mean that Tesla is worth $100 million, but I am pretty sure they are worth more.

      Also, with the recent DOE announcement that they are abandoning hydrogen technology for transportation and are instead concentrating on electric power means that Tesla is that much closer to securing its $350 million loan to build the Model S plant.

      Between a $10+ million investment from Daimler, the 1,000+ Model S reservations (which gives Tesla a minimum of $5,000,000 in basically an interest-free loan) and the recent DOE announcement of its concentration on electric power instead of hydrogen it looks like Tesla is really getting going and will become THE car company of the future.

      I am eagerly awaiting the press announcement of granting of the DOE loan.
        • 5 Years Ago
        You are kidding yourself if you don't think Musk will sell out. Look at his track record, he is an entrepreneur. His interests are in starting companies, selling out ,and moving on to the next big thing. Nothing wrong with that, he is a capitalist. I know that may be a dirty word to some on ABG but I applaud him for doing what he wants. He has an interview John Mcleroy on Autolinedetroit.com, he says he is not a car guy and is not interested in building a car company. He just felt the time was right to build an electric car.
      • 5 Years Ago
      Daimler has made a smart move to acquire Tesla. Afterall Tesla is the future of mobility of the world. Maybe we can expect electric powered Mercedes too!

      Rahul

      Indian Car Advisor (Carazoo.com)
        • 5 Years Ago
        I would say Tesla realized a it takes more than a big ego to build a viable car company. I however would not have chosen Daimler (assuming they had other suitors). Daimler's track record with Chrysler speaks volumes.
        • 5 Years Ago
        Daimler isn't "acquiring" Tesla. They merely invested in the company (OK, a sizable investment) to get their foot in the door to the future of the automotive industry.
      • 5 Years Ago
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