Aabar takes stake in Tesla

The Abu Dhabi investment company buys a four per cent share in Tesla Motors, and the electric car could soon be on the capital's roads.

In this photo made May 29, 2009, Tesla electric sports cars are seen on display in Menlo Park, Calif. The Energy Department on Tuesday, June 23, 2009 said it would lend $5.9 billion to Ford Motor Co. and provide about $2.1 billion in loans to Nissan Motor Co. and Tesla Motors Inc., making the three automakers the first beneficiaries of a $25 billion fund to develop fuel-efficient vehicles. (AP Photo/Paul Sakuma)
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Aabar Investments bought a four per cent stake in Tesla Motors yesterday, and announced that a high-speed electric sports car could be driving along the Corniche "in a matter of days". This is Aabar's second investment in the car business and bolsters the emirate's credentials as a major investor in green technology. The Tesla Roadster, which is capable of accelerating from zero to 100km in under four seconds, boasts a small but influential customer base including actors George Clooney and Leonardo DiCaprio. With a carbon-fibre body and a 208kg battery pack, the sports car sells for $109,000 (Dh400,300). Although it has delivered just over 500 Roadsters, it has already made its screen debut in Iron Man, a Hollywood blockbuster. The all-electric Tesla Roadster sports car could be seen on Abu Dhabi streets in a matter of days, said Khadem al Qubaisi (ck), the chairman of Aabar Investments. "It is a small per cent but the issue is more psychological," he said. Aabar purchased the stake from Daimler, marking the second deal with the German automaker this year. In March, the Abu Dhabi investment company bought a 9.1 per cent stake in Daimler, worth US$2.7bn. Several years of high petrol prices coupled with a growing desire to stem fossil fuel emissions into the atmosphere have propelled electric vehicles into the spotlight. Daimler is planning an all electric version of its Smart mini-car, while GM has scheduled the release of its Chevy Volt electric car in the US for next year. "With the US government focusing on electric cars as one of the core sectors of focus post the downturn, the segment is expected to gain considerable volumes by 2015," said Jose Paul Plackal, an automotive consultant for Frost and Sullivan in Dubai. The investment in Tesla will allow Daimler and Aabar to leverage their shared interest in the development of low-CO2 drive systems, Aabar said in a statement yesterday. Aabar also said it would support Daimler in the development of battery systems and electric power trains as part of plans to accelerate the spread of green vehicles. "When we acquired our stake in Daimler in March we identified a number of potential areas for co-operation between our two businesses. One of these was a desire to focus on the development of electric vehicles," Mr al Qubaisi said. Tesla has created a niche in the electric car industry with its focus on high-performance sport cars, said Mr Plackal. "The company has created a benchmark of sorts in the electric car segment with its advanced technology," he said, adding that Tesla "has had its share of pitfalls" with delayed launches of the new model, production issues, patent challenges and also some management issues in the past. While Tesla has garnered critical acclaim with its technical capabilities, the challenge ahead lies with its manufacturing expertise, according to Mr Plackal. "This is the key to Daimler and Tesla coming together," he said. "Daimler would transfer the much required manufacturing technology to Tesla and also jointly developing an electric Smart car which will make electric cars more affordable." Aabar's investment in the electric sports car maker comes just two weeks after the UN voted to house its new renewable energy agency in the UAE. Abu Dhabi biggest investor in alternative energy is Masdar, the alternative energy firm, which has invested in wind and solar farms and is planning a US$22bn carbon-neutral city on the outskirts of the UAE capital. A key element of the Masdar City transport network will be a electric-powered pod-car, an automated system will pick up and deliver passengers throughout the city. igale@thenational.ae With Reuters