Tesla’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.
Tesla’s ascent took many investors by surprise. But executives at Daimler AG, the parent company of Mercedes-Benz, had a close-up view starting in 2009 of how Tesla and its chief executive Elon Musk were taking a new approach to building vehicles that challenged the established system.
Daimler, which bears the name of the man who invented the modern car 134 years ago, bought a nearly 10% Tesla stake in May 2009 in a deal which provided a $50 million lifeline for the struggling start-up.
That investment gave Mercedes engineers an inside view of how Musk was willing to launch technology that wasn’t perfect, and then repeatedly upgrade it, using smartphone-style over-the-air updates,