STUTTGART, GERMANY and SAN CARLOS, CA – Daimler AG has acquired an equity stake of nearly 10 percent of Tesla Motors Inc., the only production automaker selling a highway capable electric vehicle in North America and Europe, according to Tesla.

The two companies have already been working closely to integrate Tesla's lithium-ion battery packs and charging electronics into the first 1,000 units of Daimler's electric smart car. In order to benefit from each other's know-how, the investment enables the partners to collaborate even more closely on the development of battery systems, electric drive systems, and in individual vehicle projects.

As part of the collaboration, Prof. Herbert Kohler, Vice President E-Drive and Future Mobility at Daimler AG, will take a seat on Tesla's board of directors.

This long-term partnership with Tesla complements Daimler's multi-facetted strategy to advance the electrification of the automobile. Daimler is also moving forward the industrialization of lithium-ion technology. In March, the company founded the Deutsche Accumotive GmbH, a joint venture with Evonik Industries AG. As a result, Daimler is the first vehicle manufacturer worldwide that develops, produces and markets batteries for automotive applications. This is based on a Daimler stockholding in Li-Tec, the German specialist for lithium-ion battery cells.

In 2004, Tesla began development of its first electric vehicle, the Roadster, which remains the only highway capable EV for sale in North America or Europe. The Tesla Roadster is the first production battery electric vehicle to travel more than 200 miles per charge and the first US- and EU-certified lithium-ion battery electric vehicle. This green supercar accelerates from 0 to 60 mph in 3.9 seconds yet gets the equivalent of 256 miles per gallon. The Roadster, which travels an estimated 244 miles per charge with zero tailpipe emissions, is the first production vehicle to break the historical compromise between automobile performance and efficiency.

The Tesla Model S builds upon the success of the Tesla Roadster by leveraging its technology into the world's first fully electric sedan. Based in Silicon Valley, Tesla unveiled the Model S in March and plans to produce it in California starting in late 2011.