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By Ucilia Wang

Tesla Motors will be building powertrains for Daimler (DAI), said Tesla CEO Elon Musk in a speech at the Detroit auto show Tuesday.

The announcement confirmed speculations that have swirled over the past year that the startup electric carmaker could ink a deal with Daimler to supply auto parts (see Green Light post).

Musk also said his company will supply lithium-ion battery packs and chargers to Daimler for a second-generation, all-electric Smart ED, reported AutoblogGreen.

Partnering with a large car company is good news for San Carlos, Calif.-based Tesla, which has run into money trouble. It wasn’t able to raise the money needed to build a factory for its second car, the Model S, and had to get emergency cash infusion from its existing investors while waiting for the U.S. Department of Energy to approve loan guarantees. Tesla plans to introduce Model S in 2011 instead of 2010.

Could Tesla also be working with Daimler to build its third model? Musk has talked about partnering with another company to develop a cheaper car that would cost less than $30,000 (see Tesla Coughs Up Sedan Price, Details On Economy Car).

Musk is holding a press conference in a little while, so we will keep you posted.

Tesla is currently shipping its first model, a $109,000 Roadster. It also announced a sports car version of the Roadster Monday (see Tesla Spiffs Up Roadster; Chrysler Touts All-Electric Sports Car).

Source: Tesla to Build Powertrains, Batteries for Daimler