Daimler AG was already working with Silicon Valley electric car maker Tesla Motors Inc. to put Tesla's battery packs in its smart cars. Now the German auto giant says it is
buying a stake of nearly 10% in Tesla and taking a board seat. As a Daimler press release puts it: "the investment enables the partners to collaborate even more closely on the development of battery systems, electric drive systems and in individual vehicle projects."
Tesla founder Elon Musk says his company doesn't need the capital at present, but there may be some spin there. In any case, from the Daimler point of view, does it really take an investment to get two sides to work together? Corporate dealmakers tend to disagree on this. Some call minority stakes a nuisance, others say they help focus management attention on a relationship.
For Musk and his investors, the investment may cut two ways. It's great to partner with Daimler. But there's also the issue of Daimler maybe having an inside track if and when it comes time to sell the company.
Our auto writer Lou Whiteman will have more on this for The Deal Pipeline readers later Tuesday.
- Kenneth KleeSee CD post Electric vehicle market remains red hot
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