DETROIT --- Tesla Motors Inc. said it will supply batteries and chargers to Daimler AG's new electric Smart car, according to a report in the Wall Street Journal.

The Smart car is slated to come out in the second half of 2010 in limited release in select markets. In 2012, regular production will begin.

Elon Musk, Tesla's chairman and chief executive, told the Wall Street Journal that Tesla will initially supply battery packs for 1,000 vehicles and that number could eventually grow to "tens of thousands."

Daimler is already sending prototypes to Daimler. The two companies began negotiating in the summer of 2007.

Musk added that Tesla hopes to develop similar partnerships with other automakers.

Based in Silicon Valley, Tesla is in the proces of seeking federal loan assistance to develop an electric-powered sedan. The company is expected to release a prototype of its Model S sedan in February. Tesla also plans to begin selling its electric Roadster sports car in June.