The new black

19 May 2009 By Jeff Segal

The German automaker bought a 10% stake in the Silicon Valley startup. Tesla s $110,000 electric sports cars certainly bring some sex appeal to the boring Mercedes maker. But with new CAFE standards taking effect, Tesla s battery technology is the real prize.

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German automaker Daimler announced that it has bought a 10% stake in Tesla, a Californiabased startup company that produces electric sports cars, including the $110,000 Tesla Roadster. The financial details of the deal were not disclosed. Daimler said that it plans to release its first batterypowered MercedesBenz vehicle in 2010, and will have batterypowered vehicles for all of its models by 2012.

US President Barack Obama also announced new rules on Corporate Average Fuel Economy (CAFE) regulations, which are aimed to improve the average fuel economy of automobiles sold in the US. The new rules will begin to take effect in 2012, and mandate that by 2016 the average fuel economy of the US light car and truck fleet is 35.5 milespergallon, a 40% increase over current standards.

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