Daimler sells its stake in Tesla as its EV partner grows up

They grow up so fast, don’t they? It seems like just yesterday (well, 2009) that Daimler bought a stake in Tesla to give it a boost and secure a partner for electric car development, and the German automaker is now selling that stake a mere five years later. According to the company, an investment is simply “not necessary” any more — Daimler can cooperate with Tesla on EVs without needing a say in its finances. The sale is theoretically a win for both companies. Daimler will pocket about $780 million, while Tesla can attract a wider range of investors.

The sell-off is partly a reflection of Tesla’s health, since it’s no longer a scrappy little startup that could easily run into trouble and jeopardize others’ plans. However, it also lets Daimler reduce its involvement in a company which is quickly becoming a rival. The Model S is widely considered a threat to Daimler’s higher-end Mercedes cars, and the competition is only going get fiercer with the Model S P85D, Model X and Model 3 likely to encroach on the brand’s turf. While Daimler says that everything remains friendly, this move will let it quickly cut ties if things ever go sour.

Filed under: Transportation

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Via: Bloomberg

Source: Daimler