Boosting its activity in electric vehicles, Daimler plans to start producing an all-electric sedan for Europe this fall that uses batteries from Tesla Motors.
Daimler is expected to launch an electric version of its entry-level line called the A-Class E-Cell at the Paris Auto Show next month, according to reports.
Daimler will start manufacturing 500 units of the A-Class E-Cell this fall in Germany for the European market, according to a company representative. The company has not yet decided whether it will be offered in the U.S., she said.
The car will have a range of over 124 miles. Tesla will supply the lithium-ion battery and charger for the car, according to Daimler.
Tesla engineers purchased an A-Class in Europe and built an electric-version prototype, which helped speed up introduction of the E-Class, Tesla told The New York Times last month. Daimler invested in Tesla in 2009 and is a corporate partner.
Tesla's batteries will also appear in an electric version of the RAV-4 which Toyota plans to debut at the 2010 Los Angeles Auto Show, Toyota said on Monday. It plans to have an electric vehicle for the U.S. market in 2012.
Daimler's push into electric vehicles is being accelerated by European targets to reduce CO2 emissions from vehicles. "We won't be able to meet the target of 95 grams CO2 in 2020 without electric vehicles with batteries and fuel cells," Daimler head of research Thomas Weber told Reuters.
In the U.S., Daimler plans to offer an electric version of its mini car, the ForTwo Electric Drive, for lease starting next month. Like other automakers, Daimler is primarily targeting its electric vehicles at fleet buyers because of the higher upfront cost.