Both companies already cooperate on the development of lithium-ion batteries: Tesla has the expertise Daimler seeks (and needs) to integrate the batteries into the electrically-driven version of the 'Smart', a subcompact produced by the Daimler subsidiary of the same name. On the other hand, also Daimler has to offer valuable technology for Tesla. The Stuttgart (Germany) based car vendor already has developed a lithium-ion pouch cell for automotive applications. The company also drives the development of these energy storage devices in a cooperation with technology company Evonik AG.

With the move, Daimler hopes to accelerate the commercialization of electric vehicles in a global scale. Tesla is currently the only car vendor selling a highway-capable electric vehicle. The car offers a driving range of almost 400 km with one charge.

Daimler has several e-car projects in the offings with the e-Smart being the one closest to market. The e-Smart is currently tested London in day-to-day assignments by fleet operators and other users. Commercial production will start later this year. In 2010, Daimler hopes to roll out its first commercial electrical Mercedes-Benz model.