Daimler Shares Tesla with Abu Dhabi

Just a few months after Daimler bought a 10 percent stake in Silicon Valley startup electric carmaker Tesla Motors, the Germans have sold 4 percent to an investment firm in Abu Dhabi. The important thing to note here is that this deal actually means that Tesla might have a more diverse future than anyone currently imagines.

Tesla is currently working two main business angles: one as a manufacturer of electric vehicles, such as its high-performance Roadster and its recently announced luxury sedan; and another as a power- and drivetrain supplier. There’s action on both fronts. On the vehicle side, the company recently received a $465 million loan from the Department of Energy, enabling it to begin more serious work on the Model S sedan.

On the powertrain side, it’s becoming increasingly apparent that Tesla’s unusual lithium-ion battery design, coupled with a transmission that has been debugged via the Roadster, is attracting attention as the only EV engine that can currently deliver the all-electric range that consumers demand. A version of Tesla’s powerplant will be going into the electric Smart car, which is produced by Daimler.

Last year, when I talked with Tesla about various production issues related to the Roadster, the company indicated that the powertrain business was profitable. It now appears that it’s also generating investment capital and ultimately may turn out to be the jewel of the operation. Because when you think about it, Tesla is basically a powertrain maker. The Roadster chassis is produced by Lotus, and it wouldn’t be a stretch to anticipate that the Model S could morph into a Mercedes.

Tesla has the best brand right now in the EV business, so even if it did surrender some manufacturing autonomy, it might not ultimately be that big a problem. The vehicles are great marketing, but they may some day end up having served their purpose: to popularize a powertrain business that eventually allows the company to thrive as a supplier and innovator in the EV world of the second half of the century.