A potential conflict brewing between Daimler and Renault

Article by Christian Andrei, on August 29, 2010

A potential conflict is brewing between business partners, Daimler AG and Renault SA, which both aim to become the leading maker of electric-car batteries. Daimler CEO Dieter Zetsche and Renault SA CEO Carlos Ghosn have both said that they want to build the best power pack as they start to jointly develop electric cars.

Last week, Daimler and Renault swapped 3.1% stakes to affirm a vehicle and engine development cooperation. The problem that many analysts have seen is that they seem to have excluded the topic of batteries from the deal.

Each company will be seeking the right to install their power packs in electric-powered Smart and Twingo cars they will jointly develop by 2013.

Anil Valsan, London-based director of automotive research at Frost & Sullivan said that Daimler has shown throughout its history that it is hesitant about giving up its own technology path.

Valsan thinks that Daimler's battery may have a technical edge, but Renault-Nissan's solution is likely to be more cost competitive.

Daimler and Renault are in agreement though that the technology for storing and managing electricity is vital in the shift to pollution-free driving.

In an interview last March, Thomas Weber, Daimler's development chief, said that the heart of future vehicles will be batteries, not engines.

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