German car manufacturer Daimler AG takes approximately a 10% equity share of the California electric vehicle maker Tesla Motors Inc.

The two car producers have been in collaboration to make use of Tesla’s charging technology and battery packs made from lithium ion in the first 1000 units of electric Smart cars made by Daimler.

The investment of Daimler may paved the way in further joint efforts to develop more efficient technology to produce batteries and drive systems which can be used for future electric vehicles.

The research units of both car makers see the move as a welcome development in pushing for the faster commercialization of EV’s in the world market.

Tesla is the only carmaker in Europe and North America to produce highway capable electric vehicles. The San Carlos, California based firm is aiming to take advantage of Daimler’s technology on lithium ion pouch battery, supply chain structure, and engineering.

As part of the stake, the vice president of the E-Drive and Future Mobility unit of Daimler will get a board seat at Tesla.

Tesla prides itself in its current lineup selling in Europe and North America. The Roadster which is for sale in both continents is a performance car that can cover 244 miles in a single charge with zero emissions. The Roadster has a fuel mileage of 256 mpg.

Last March, Tesla unveiled the Model S which is considered the first sedan that is fully electric. The Model S will be in California assembly line starting the latter part of 2011.

Daimler, on the other hand, will be pushing for the production of 1000 Smart ForTwo EVs in their Hambach, France factory.