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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