Mercedes’ parent company, Daimler, has divested its financial stake in Tesla; but has pledged to continue working with Elon Musk's electric car company.

The German automotive giant acquired a stake in Tesla in May 2009, and the two companies have collaborated on projects like the recent Mercedes-Benz B-class Electric Drive in global markets. The batteries for the first generation of the Smart Fortwo electric drive also came from the California-based EV company. Despite the end of the financial deal, Tesla will continue to supply the power trains for the B-class Electric Drive. Daimler chairman Dieter Zetsche said, “Our partnership with Tesla is very successful and will be continued.”

Bodo Uebber, Daimler's finance chief, explained, “We are extremely satisfied with the development of our investment in Tesla, but it is not necessary for our partnership and cooperation. For this reason, we have decided to divest of our shares. This will also allow Tesla to broaden its investor base.”

The sale of Daimler’s stake in Tesla will result in a cash inflow of around $780 million, which Daimler says will be used to “strengthen its operational business”.