Daimler, Renault extend electric cars deal- paper

Sun Feb 27, 2011 11:15am EST

* Renault, BMW agree on Smart, Twingo supply deal - paper

* BMW seeks alliance for electric engines business - paper

FRANKFURT, Feb 27 (Reuters) - Renault (RENA.PA) and Daimler (DAIGn.DE) have reached a new deal under which the former will develop electric motors for the Smart and Twingo brands, while the latter will supply batteries, a German paper reported. "By doing this we will immediately be able to boost sales," Daimler's head of research and development Thomas Weber told Germany's Stuttgarter Zeitung in an interview due to be published on Monday.

France's Renault, its Japanese partner Nissan (7201.T) and Daimler signed a cooperation deal for their electric cars last April, initially focusing on small cars, light commercial vehicles and engines. [ID:nLDE6361D5]

The new agreement is an extension of this deal.

The Stuttgart-based group is also looking for an alliance partner for its electric engines business, Weber said.

"We are looking for a partner who can offer us additional know-how in the field of electrics and electronics, and has the necessary power to approach a project like this with us," Weber said, adding that he could also imagine closing a deal to jointly sell electric engines to other carmakers.

The move comes as carmakers and car parts suppliers battle for a foothold in the lucrative market for zero-emission vehicles and deadlines for lower emission levels loom.

(Reporting by Josie Cox. Editing by Jane Merriman)

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