Daimler restructures cooperation with Tesla

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Oct 21, 2014, 04:35 ET

STUTTGART, Germany, Oct. 21, 2014 /PRNewswire/ --

Termination of share-price hedging and sale of 4% stake in Tesla
Ongoing cooperation on current projects
Daimler to continue sourcing powertrain for Mercedes-Benz B-Class Electric Drive from Tesla
Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: "Our partnership with Tesla is very successful and will be continued."

Daimler AG (stock exchange symbol: DAI) has reorganized its cooperation with Tesla Motors Inc. In this context, Daimler has terminated the share-price hedge it initiated in 2013 and has sold its stake in Tesla of approximately 4%. The cooperation between the partners on the automotive projects is unaffected. Development work for the Mercedes-Benz B-Class Electric Drive is completed, the partnership with Tesla remains in place.

"We pursue our strategy for emission-free driving consequently. Electric vehicles are one component of this roadmap. In Tesla we do have a bold partner. Together we launched the B-class Electric Drive successfully in the United States this summer. In November, the B-Class Electric Drive will be launched in Europe as well. We are convinced that this powerful electric vehicle for every day use will appeal to a lot of customers," stated Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. Furthermore, the batteries for the first generation of the smart for two electric drive had been from Tesla. The two-seater with electric drive is one of the best-selling electric cars in Germany. "Our partnership with Tesla is very successful and will be continued," added Zetsche.

Bodo Uebber, Member of the Board of Management of Daimler AG for Finance & Controlling and Financial Services: "We are extremely satisfied with the development of our investment in Tesla, but it is not necessary for our partnership and cooperation. For this reason, we have decided to divest of our shares. This will also allow Tesla to broaden its investor base."

The sale of Daimler's stake in Tesla will result in a cash inflow of around $780 million, which will be used to strengthen Daimler's operational business. The impact on EBIT for the year 2014 is approximately in the same amount.

"We have supported Tesla as a startup company for many years and have learned a lot from Tesla. At the same time, Tesla was able to profit from our automotive expertise. The cooperation with Tesla is one component of our activities in the field of electric mobility. It optimally complements our involvement in Deutsche ACCUmotive," explained Prof. Dr. Thomas Weber, member of the Board of Management of Daimler AG for Group Research & Mercedes-Benz Cars Development.

Daimler has the industry's biggest portfolio of electric vehicles, from cars and vans to buses and light trucks: smart electric drive, Mercedes-Benz

A-Class E-CELL, B-Class Electric Drive, B-Class F-CELL, SLS AMG Coupe Electric Drive, Vito E-CELL, Mercedes-Benz Citaro FuelCELL-Hybrid, Fuso Canter E-CELL and Freightliner Custom Chassis MT E-CELL All-Electric. Systematic hybridization is also a fixed element of Daimler's powertrain strategy. In 2014, Mercedes-Benz sold more automobiles with hybrid drive than all other German manufacturers combined. The focus will continue to be on plug-in hybrids in the coming years. By the year 2017, Mercedes-Benz Cars will launch ten new plug-in hybrid models in all market segments.

Daimler initially acquired a 9.1% interest in Tesla in May 2009. 40% of that investment was transferred to Aabar Investments PJSC in the context of a joint strategic project in July 2009. Tesla has been listed on the stock exchange since the end of June 2010. As a result of capital increases at Tesla, Daimler's stake in the company decreased to around 4%, without affecting the two companies' strategic cooperation or joint development projects.

Further information from Daimler is available at:
www.media.daimler.com and www.daimler.com

Forward-looking statements:
This document contains forward-looking statements that reflect our current views about future events. The words "anticipate," "assume," "believe," "estimate," "expect," "intend," "may," "can," "could," "plan," "project," "should" and similar expressions are used to identify forward-looking statements. These statements are subject to many risks and uncertainties, including an adverse development of global economic conditions, in particular a decline of demand in our most important markets; a worsening of the sovereign-debt crisis in the euro zone; an increase in political tension in Eastern Europe; a deterioration of our refinancing possibilities on the credit and financial markets; events of force majeure including natural disasters, epidemics, acts of terrorism, political unrest, industrial accidents and their effects on our sales, purchasing, production or financial services activities; changes in currency exchange rates; a shift in consumer preferences towards smaller, lower-margin vehicles; a possible lack of acceptance of our products or services which limits our ability to achieve prices and adequately utilize our production capacities; price increases for fuel or raw materials; disruption of production due to shortages of materials, labor strikes or supplier insolvencies; a decline in resale prices of used vehicles; the effective implementation of cost-reduction and efficiency-optimization measures; the business outlook for companies in which we hold a significant equity interest; the successful implementation of strategic cooperations and joint ventures; changes in laws, regulations and government policies, particularly those relating to vehicle emissions, fuel economy and safety; the resolution of pending government investigations and the conclusion of pending or threatened future legal proceedings; and other risks and uncertainties, some of which we describe under the heading "Risk and Opportunity Report" in the current Annual Report. If any of these risks and uncertainties materializes or if the assumptions underlying any of our forward-looking statements prove to be incorrect, the actual results may be materially different from those we express or imply by such statements. We do not intend or assume any obligation to update these forward-looking statements since they are based solely on the circumstances at the date of publication.

About Daimler
Daimler AG is one of the world's most successful automotive companies. With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers of premium cars and the world's biggest manufacturer of commercial vehicles with a global reach. Daimler Financial Services provides financing, leasing, fleet management, insurance and innovative mobility services. The company's founders, Gottlieb Daimler and Carl Benz, made history with the invention of the automobile in the year 1886. As a pioneer of automotive engineering, Daimler continues to shape the future of mobility today: The Group's focus is on innovative and green technologies as well as on safe and superior automobiles that appeal to and fascinate its customers. For many years now, Daimler has been investing continually in the development of alternative drive systems with the goal of making emission-free driving possible in the long term. So in addition to vehicles with hybrid drive, Daimler now has the broadest range of locally emission-free electric vehicles powered by batteries and fuel cells. This is just one example of how Daimler willingly accepts the challenge of meeting its responsibility towards society and the environment. Daimler sells its vehicles and services in nearly all the countries of the world and has production facilities on five continents. Its current brand portfolio includes, in addition to the world's most valuable premium automotive brand, Mercedes-Benz, the brands smart, Freightliner, Western Star, BharatBenz, Fuso, Setra and Thomas Built Buses. The company is listed on the stock exchanges of Frankfurt and Stuttgart (stock exchange symbol DAI). In 2013, the Group sold 2.35 million vehicles and employed a workforce of 274,616 people; revenue totaled €118.0 billion and EBIT amounted to €10.8 billion.

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SOURCE Daimler Corporate Communications