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February 6, 2019 1:30 PM, EST

Elon Musk Tweet Sparks Mercedes-Tesla Talks Over Electric Van Project

Sprinter van Daimler AG’s Mercedes-Benz Sprinter van (Krisztian Bocsi/Bloomberg News)

Elon Musk’s praise for Daimler AG’s Mercedes-Benz Sprinter van triggered talks between the German manufacturer and Tesla Inc. over potential cooperation on an electric version.

After a November tweet by Musk, the companies started sounding out possible prospects for a battery-powered van through a series of phone calls involving Jerome Guillen, a Tesla executive who previously worked for Daimler.

“These talks are happening,” CEO Dieter Zetsche said Feb. 6 in Stuttgart, adding that the “outcome is open.”

The enthusiasm by Tesla’s CEO apparently was spurred by feedback from company technicians who use Sprinter vans to travel to customers requiring service, Zetsche said.

Daimler will start offering an electric version of the Sprinter later this year. The midsize van will have a battery range of about 93 miles and a maximum payload of more than 2,200 pounds. It remained unclear if the potential project would involve joint development of a new vehicle or if Tesla technicians would switch to the upcoming battery-powered version.

Dieter Zetsche

Daimler AG CEO Dieter Zetsche (Michaela Handrek-Rehle/Bloomberg News)

A cooperation with Tesla would be a revival of ties that go back a decade when Daimler acquired a stake in the Silicon Valley startup. It sold the holding in 2014 and booked a $780 million windfall profit at the time.

Teaming up with old and new peers is becoming increasingly important in the auto industry to share the enormous costs for developing electric and self-driving cars. Zetsche’s successor Ola Kallenius, who is set to take over as Daimler CEO in May, said last month that he remains open to such initiatives.

Daimler’s existing alliance with Renault SA and Nissan Motor Co. forged in 2010 is “largely unaffected” by the tensions that erupted after the surprise arrest of Carlos Ghosn, Zetsche said Feb. 6. Joint projects in areas like vehicle development or engine supply are mainly bilateral contracts with Renault or Nissan. “We’ll just have to wait now how the alliance is developing further,” Zetsche said.

The maker of Mercedes-Benz luxury cars also is discussing further cooperation projects with its largest shareholder, Zhejiang Geely Holding Co. Zetsche said the company is open to adding Geely-made premium electric cars to a ride-sharing initiative in China that was announced last year and so far is focused on Mercedes models.

Talks are ongoing about other projects, “which could also take on a bigger dimension” than the ride-sharing program, Zetsche said, declining to elaborate.