Tesla Inc's rapid rise to become the world's most valuable carmaker could mark the start of a new era for the global auto industry, defined by a Silicon Valley approach to software that is overtaking old-school manufacturing know-how.
Mercedes engineers helped Tesla develop its Model S luxury sedan in exchange for access to Tesla's partially hand-assembled battery packs, but in 2014 Daimler decided to sell their stake amid doubts Tesla's approach could be industrialized at scale. They are putting their money on Musk and his company, even though Mercedes-Benz alone sold 935,089 cars in the first half of 2020, dwarfing the 179,050 delivered by Tesla in the same period.
Despite having batteries supplied by Tesla, the Mercedes had a shorter operating range after Daimler engineers configured the B-class more conservatively to address their concerns about long-term battery degradation and the risk of overheating, a second Daimler staffer who worked on the joint projects told Reuters.
Daimler's engineers suggested the underbody of the Model S needed reinforcing to prevent debris from the road puncturing a battery pack, the first Daimler engineer said. Established automakers are playing catch-up to Tesla, designing their own software operating systems and dedicated electric cars. Toyota overtook the market capitalization of former industry leader General Motors in 1996, though it wasn't until 2008 that it sold more vehicles than its Detroit rival.
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