Daimler, Tesla charge ahead on electric car
German auto giant and electric vehicle maker announce alliance.
NEW YORK†(CNNMoney.com) -- Daimler AG and Tesla Motors announced Tuesday that they will partner to manufacture electric cars.
As part of the agreement, German automaker Daimler said it had acquired an equity stake of nearly 10% in San Carlos, Calif.-based Tesla Motors.
The companies said the alliance will "make electro mobility a reality."
"Our strategic partnership is an important step to accelerate the commercialization of electric drives globally," said Thomas Weber, member of the Board of Daimler AG, in a press release.
Tesla Motors designs and manufactures electric vehicles. Its battery-powered Roadster is the only highway-capable production electric vehicle for sale in North America and Europe.
The announcement comes as the Obama administration is due to propose stricter fuel economy standards in a bid to reduce vehicle greenhouse gas emissions.
Manufacturers have been in a race to tap the market for battery-powered vehicles.
Daimler has spent years focused on the research and development of emission-free vehicles and electric batteries.
Electric carmakers, meanwhile, have hit some speed bumps amid the economic downturn.
Tesla recently had to push back the debut of its four-door sedan, a more affordable alternative to its luxurious Roadster. Tesla expects to begin producing the Model S in late 2011. It originally had been due out in 2010.
Last month, Daimler reached an agreement with Chrysler and owner Cerberus Capital Management to exit its 19.9% stake in the company.