Carmakers Daimler, Renault and Nissan are redoubling their electric cars effort in the race for market share in a world of tighter emission rules.
Daimler's research chief, Thomas Weber, told Reuters in an interview its cooperation with Renault and Nissan will be expanded to include all three partners as far as electric motors, batteries and powertrains are concerned.
The move comes as carmakers and car parts suppliers rush to gain a foothold in the market for zero-emission vehicles as deadlines for lower emission levels near.
Toyota Motor Corp said Monday it would offer a plug-in version of its Prius model positioned to be the cheapest green car of its kind by 2012.
France's Renault, its Japanese partner Nissan and Daimler signed a cooperation deal in April initially focusing on small cars, light commercial vehicles and engines.
The cooperation included so far the next-generation Smart fortwo and Renault Twingo models, including electric versions, as well as expanding the Smart and Twingo families.
Car emission standards are becoming stricter to fight global warming. Brussels targets an overall level of around 95 grams of carbon dioxide per km by 2020 for new cars sold in Europe.
We won't be able to meet the target of 95 grams CO2 in 2020 without electric vehicles with batteries and fuel cells, Weber said in the interview conducted last Thursday.
But the new technology is still in its infancy and it won't be easy to then also earn money with these cars, Weber added.
That's why Daimler has decided to broaden its existing partnership with Renault and Nissan, hoping to cut costs by building scale.
Daimler benefits from economies of scale for small three- and four-cylinder engines, Weber said. We would have reached quantities of about 500,000 engines at most on our own. Together with Renault we are talking about several million.
Weber added he expects Nissan to purchase a mid-five-digit number of diesel engines from Mercedes as part of the deal.
Daimler shares were up 0.8 percent at 44 euros by 1319 GMT, outperforming the DJ Stoxx autos sector index. Renault shares eased 0.9 percent, while Nissan closed down 0.3 percent.
Daimler will have to bring down its fleet's emissions to below 140 grams of carbon dioxide by 2012 or else risk fines. Emissions of its fleet -- ranging from its Smart brand to the Mercedes S-Class and E-Class saloons -- equated to 160 grams of carbon dioxide on average last year.
To help get there Daimler agreed in March with China's BYD
to develop electric cars for China. Daimler said it aims to sell 150,000 to 200,000 zero-emission passenger cars in Europe by 2020. The carmaker sold just over a million cars overall last year.
Sales of premium carmakers like Daimler are driven by soaring demand from China as living standards rise in the world's most populous nation.
As a result, Daimler plans to produce more cars in China and to broaden its cooperation with German peer BMW to include purchasing car parts in China, Weber said.
BMW procurement chief Herbert Diess told Reuters about such plans in an interview this month and said he expects to save about 100 million euros ($128.7 million) per year from 2012/2013 thanks to the cooperation with Daimler.
(Reporting by Hendrik Sackmann, writing by Eva Kuehnen; Editing by Louise Heavens)