EV maker Tesla to provide batteries for Daimler's Smart range

San Carlos, California-based electric car company, Tesla said yesterday that it had been selected to provide the batteries and chargers for Daimler's Smart EV electric car and would deliver 1,000 of the batteries this year and next.

Daimler's Smart division announced plans to launch an electric vehicle at the North American International Auto Show as automakers from Toyota Motor Corp. and Ford Motor Co. revealed plans to develop electric vehicles. Daimler currently has a small fleet of electric Smarts on the road in London with batteries by a different supplier. (See: One million and still rolling: Mercedes smart fortwo completes 10 years)

"Daimler just gave me permission this morning to announce the news," said Tesla CEO Elon Musk, best known as the co-founder of PayPal, which was bought out by online auctioneer eBay. Smart will launch a limited release in select markets in the second half of 2010 and regular production in 2012.

Musk said that he had been in discussions with Daimler, maker of the SmartCar and Mercedes-Benz, since mid-2007, and that Tesla delivered its first prototype a year ago. If the program develops, he said, it could lead to the production of "tens of thousands" of the batteries. A fleet of electric Smart cars now being tested in London does not use the Tesla batteries, Musk said. The final version of Tesla's battery, which will be built in California, is still in development.

According to company spokeswoman Rachel Konrad, Tesla's powertrain business, as distinct from its full-fledged electric vehicle unit (which sells the $109,000 electric Roadster) is "cash-flow positive." Musk said that although the company as a whole was not yet profitable, he expected to be in the black on operations by "the middle of this year." (See: Tesla Motors opens electric car showroom in California to enthusiastic response)

To date Tesla has delivered more than 150 of its Roadsters, Donoughe said. Later this year it will begin selling a souped-up, more expensive ($128,500) version called the Roadster Sport, and will begin selling the Roadster in Europe in June.

The company is in the process of seeking federal loan assistance to help develop a sedan, which it hopes to get on the road in mid-2011. Tesla will release a drivable prototype of the Model S sedan in February, Musk said.

And, the vehicle will come with a price tag of $49,900 after the consumer tax credit.