Tesla to provide lithium ion batteries to Mercedes-Benz

When Daimler R&D boss Dr. Thomas Weber told Leftlane two weeks ago his company would have plug-in electric cars on sale in 2010, we were a little skeptical. It was the first we heard of such plans, and the timeframe was extremely short. We may now have an explanation -- Tesla.

Rumors first broke last week about a possible deal between Daimler and Tesla, but most analysts were expecting the Mercedes maker to provide the small Silicon Valley startup with technology, not the other way around.

As it turns out Tesla, which recently announced plans to bring an electric sedan to market, will supply lithium ion batteries to the German carmaker, according to a new report by Germany's AutomobilWoche. It's an impressive feat for the upstart auto firm, whose $146 million in funding is chump change to Daimler.

The first models to use the new electric powertrain will include a Smart car -- 100 examples of which are being tested in London as this is written -- and a small Mercedes-Benz model, likely the next-generation A- or B-class subcompact. Daimler CEO Dieter Zetsche promised both model will be available by 2010 in European markets, and they're expected to come to North America soon thereafter.

As previously reported, Daimler will make use of the existing A-Class platform to springboard into the electric car business. Although the A-Class is only offered with internal combustion engines, it actually has a sandwich floor layout, originally conceived to carry either a bolt-in fuel cell or an electric battery pack. This unutilized feature is about to come in very handy for 'Benz.

"On the market today there is no better architecture for electric cars than the A- and B-class and we won't waste that," explained Weber.

Daimiler is planning a slow rollout for electric technology, Weber said last month. "Production will be a step-by-step approach for Smart. The next step should be a production run of above 1000 but below 10,000 cars, but internally we are a little bit more precise," he said.