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Tesla Motors CEO, chairman and product architect Elon Musk, at the wheel, and chief designer Franz von Holzhausen take the prototype Tesla Model S all-electric five-door sedan for a spin after its unveiling in Hawthorne, Calif., on March 26, 2009. (Reed Saxon/Associated Press)

German automaker Daimler AG said Tuesday it has acquired a nearly 10 per cent stake in California-based electric car maker Tesla Motors Inc. as part of plans to ramp up its own electric car production.

The two companies are already working together on using Tesla's lithium-ion battery packs and charging electronics in Daimler's electric version of its two-seat Smart car.

The stake's value was not disclosed, but Weber said it was in the double-digit millions.

Thomas Weber, research and development chief at Daimler's Mercedes-Benz Cars unit, said the stake will let the two companies work more closely on developing better battery and electric drive systems for vehicles destined for the consumer market.

Tesla chief executive Elon Musk said in a statement that the partnership would help it bring the Tesla Model S car to production faster and "ensure that it is a superlative vehicle on all levels."

As part of the deal, Daimler vice-president Herbert Kohler will take a seat on Tesla's board of directors.

Daimler, along with other automakers, is working on developing more battery and electric-powered cars. Earlier this year, it founded the Deutsche Accumotive GmbH, a joint venture with Evonik Industries AG.

Testing fleet

Daimler has been testing a fleet of 100 electric-powered Smart Fortwo cars in London and, later this year, will start production of up to 1,000 of the cars at its assembly plant in Hambach, France.

"The next step will be an electrified Smart with a Tesla battery pack," Weber said. "This car will be available on the market at the end of this year."

Tesla, headquartered in San Carlos, Calif., has earned praise for its low-slung Roadster, the $109,000 US two-seat electric sports car that can get more than 320 kilometres on a single charge with an acceleration of zero to 60 mph (96 km/h) in just under four seconds.

The Tesla Model S is an all-electric, five-door sedan that can carry up to seven people as far as 483 kilometres on a single charge. It was unveiled in March and production is set to begin in late 2011.

The sticker price for the Model S will be $49,900 US after a $7,500 U.S. government rebate for buying an electric vehicle.

The Model S and the Roadster can be charged by plugging into wall sockets.