Abu Dhabi investors snap up stake in Tesla

Deal to acquire part of equity stake from Daimler further strengthens investor backing for electric car firm

By James Murray

14 Jul 2009

Comments: 1

Tesla Roadster

The United Arab Emirates' status as one of the go-to locations for clean tech firms seeking investment was further underlined yesterday with news that Abu Dhabi-based Aabar Investments has snapped up a stake in US electric car firm Tesla Motors.

The investment firm announced it has shelled out an undisclosed sum to purchase 40 per cent of German car giant Daimler's equity stake in Tesla.

In May, Daimler paid an undisclosed sum, estimated in some quarters to be worth about $50m, for an equity stake of just under 10 per cent in the high-profile electric car manufacturer. Under the deal, Tesla also agreed to provide 1,000 battery packs for Daimler's new electric smart cars, while the two firms also signed a deal that will see them co-operate on the development of new battery technologies.

Aabar's acquisition of around four per cent of Tesla follows its own deal in March with Daimler that saw it acquire a 9.1 per cent stake in the auto giant and sign an agreement to work together on new joint ventures.

The two companies said in a statement that the new investment would allow " Daimler and Aabar to leverage their shared interest in the development of low-CO2 drive systems".

The move also puts further distance between Tesla and the high-profile financial problems that afflicted the firm late last year.

Recent months have seen the company bounce back strongly from the cashflow difficulties that resulted in a number of redundancies at the firm. Since May, the company has received financial backing from Daimler, secured a $465m low-interest loan from the US government to finance a production plant for its new Model S all-electric sedan, and rolled out a new fleet of showrooms in North America and Europe.

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