Daimler and Masdar in talks for electric car venture

Daimler is in talks with Masdar City about working in Abu Dhabi's carbon-neutral development.

PARIS // Daimler, the world's second-largest maker of luxury cars, is in talks with Masdar City about working on electric vehicle technology in Abu Dhabi's carbon-neutral development. Dr Dieter Zetsche, the chairman of Daimler and the head of Mercedes-Benz cars, said the company was in talks with Abu Dhabi about the collaboration, which could include providing electric cars for the city.

Abu Dhabi has close ties to Daimler as the emirate's Aabar Investments owns a stake in the German car maker. "[In] Masdar City, there are very exciting activities to try to get a window looking into the future," Dr Zetsche said at the Paris Motor Show, which opens to the public tomorrow. "And there we are certainly interested in participating because we do believe we are leading-edge in these technologies."

He said Daimler's research department has been closely involved in the talks. A spokesman for Masdar declined to comment. Dr Zetsche's comments come just a month after Nissan expressed a similar ambition to form a partnership with Masdar. Environmentally friendly cars are high on the agenda at the Paris Motor Show, with several makers unveiling their low-emission, hybrid or electric cars. Jaguar displayed its CX-5 electric sports car.

The talks with Daimler, in which Aabar holds a 9 per cent stake, signals yet another move by the UAE to push into the electric vehicle industry. Aabar also holds a 3.63 per cent stake in electric vehicle company Tesla Motors, while Al Yousuf Motors in Dubai recently bought Phoenix Motorcars, an electric- car maker based in California. Tesla has recently teamed up with Toyota to develop a battery-powered version of the RAV4 sports utility vehicle, while Daimler and Renault are looking at an expanded co-operation that may include electric car parts.

IHS Global Insight, an economic research firm, predicts electric vehicles including plug-in hybrids and battery-powered cars will comprise nearly 20 per cent of the global market for light vehicles in 2030. But challenges remain for the fledgling industry, given the limited range of many of these vehicles and the overall cost of technology.