Daimler on Tuesday said it had acquired an equity stake of nearly 10% of California-based electric sportscar maker Tesla Motors.

"This investment deepens the relationship between the inventor of the automobile and the newest member of the global auto industry. Tesla is the only production automaker selling a highway capable electric vehicle in North America and Europe," Daimler said in a statement.

A press conference in Stuttgart was told the two companies had already been working closely to integrate Tesla's lithium-ion battery packs and charging electronics into the first 1,000 units of Daimler's electric Smart model.

"In order to benefit from each other's know-how, the investment enables the partners to collaborate even more closely on the development of battery systems, electric drive systems and in individual vehicle projects," Daimler added.

"Our strategic partnership is an important step to accelerate the commercialisation of electric drives globally," said Daimler R&D chief Thomas Weber. "As a young and dynamic company, Tesla stands for visionary power and pioneering spirit. Together with Daimler's 120 years of experience in the automotive sector this collaboration is a unique combination of two company's strengths. This marks another important milestone in Daimler's strategy for sustainable mobility."

"It is an honour and a powerful endorsement of our technology that Daimler would choose to invest in and partner with Tesla," said Tesla CEO Elon Musk.

"Daimler is also on the leading edge in the field of sustainable mobility. Among others the lithium-ion pouch-cell battery developed by Daimler and especially designed for automotive applications is of interest to us. We are looking forward to a strategic cooperation in a number of areas including leveraging Daimler's engineering, production and supply chain expertise.

This will accelerate bringing our Tesla Model S [a luxury EV sports sedan] to production and ensure that it is a superlative vehicle on all levels."

Daimler's Herbert Kohler, who heads E-drive and future mobility at the automaker, will sit on Tesla's board.

Last March, Daimler founded Deutsche Accumotive, a joint venture with Evonik Industries, becoming the first vehicle manufacturer worldwide to develop, produce and market batteries for automotive applications.
Smart has been trialling 100 electric cars in London since 2007 in the hands of both fleet operators and private customers.

Later this year the Smart plant in Hambach, France, will start production of up to 1,000 units of the second-generation smart Fortwo model with electric drive, which will initially be used for mobility projects such as e-mobility Berlin or e-mobility Italy.

This year Daimler is also starting small-series production of the Mercedes-Benz B-Class with a fuel cell drive system and, in 2010, will introduce its first battery-powered Mercedes. From 2012, Daimler plans to equip all Smart and Mercedes EVs with in-house-produced lithium-ion batteries.

In 2004, Tesla began development of its first electric vehicle, the Roadster, which remains the only highway capable EV for sale in North America or Europe. The  model was the first production battery electric vehicle to travel more than 200 miles per charge and the first US- and EU-certified lithium-ion battery EV.

Tesla unveiled the Model S in March and plans to produce it in California from late 2011.