Tesla and Daimler: Is the honeymoon over?

Tesla Model S

The partnership between Tesla and Daimler, which dates from 2008, has been advantageous for both companies, with the stodgy Germans enjoying a little of Tesla’s bad-boy chic, and the Silicon Valley upstarts benefiting from Daimler’s old-world respectability. However, it’s sounding as if Daimler has lost that lovin’ feeling.

Chief Executive Dieter Zetsche told reporters at last week’s Beijing Auto Show that Daimler won’t be an investor in Tesla’s planned Gigafactory. “A question is, when do you realistically see the next-generation batteries,” Mr. Zetsche said. “Lithium air, lithium sulfur? No one has the answer to the next generation…it might be late for that kind of investment [in lithium-ion batteries].”

Now, if Mr Zetsche is saying that investing in the Gigafactory means committing to an obsolete technology, that sounds mighty thin. It will be several years before the first battery pack rolls off the line at the Gigafactory, and we’re pretty sure that Tesla and its partners will be using whatever chemistry is the state of the art at that time.

We suspect the real reason for Daimler’s cold shoulder is to be found not in the American Southwest, but in Europe and China. Daimler recently acquired two German battery firms, which are producing the batteries used in the current model of the smart fortwo electric drive (the previous generation used batteries from Tesla).

Daimler has also unveiled plans to build an all-electric vehicle called the Denza with Chinese partner BYD, which Zetsche called “one of the most advanced makers of batteries for electric vehicles.”

As far as we know, Tesla is still providing the batteries for the Mercedes-Benz B-Class Electric Drive. However, Daimler’s decision to turn to other partners for what are arguably more promising vehicles, sales-wise, makes us wonder if it is losing interest in Tesla as a battery supplier.

Mercedes-Benz USA head Steve Cannon piled on the trash-talk at last week’s New York Auto Show, saying, “Folks are buying a Tesla now because they’re kind of cool, but if you’re a Tesla buyer, you have to have multiple cars. Tesla is great, but you’ve got plenty of well-established brands that mean luxury, like Porsche or Mercedes-Benz, and how long do you think we’re going to wait and let Tesla be out there alone? So, good job, Tesla, but will they be able to maintain that with the others of us out in the market? That remains to be seen.”

 

Source: Forbes, Wall Street Journal, Green Car Reports
Image: pestoverde/Flickr