21st January, 2009

Smart, the producer of one of the world’s most economical and environmentally friendly cars - the Smart Fortwo - is advancing the development of alternative propulsion technologies to develop even more ecologically friendly vehicles.

The Smart Fortwo electric drive (ed) further demonstrates the pioneering role of this young car brand with an emission-free, highly efficient and quiet two-seater, representing sustainable mobility at its highest level.

Presented at this year’s Detroit Motor Show in USA, production of this next generation Smart Fortwo ed will commence at the end of this year.

As this car reaches production maturity, German car maker Daimler AG is exploring market release opportunities within the enormous United States automotive market.

Lithium-ion battery technology

The Smart Fortwo ed series will be equipped with a state-of-the-art lithium-ion battery. Lithium-ion technology has clear advantages over other type of batteries, including compact dimensions, high performance, shorter charging times and higher reliability.

London pilot project

In 2007, Smart started a pilot project in London, England to test the Smart Fortwo electric drive vehicle. Using prototypes based on the first generation Smart Fortwo, Smart leased 100 electric versions of the Fortwo to the general public in order to gain real-world market-based experience with this technology, and to determine the technology’s long-term sustainability.

The project has proven to be very successful, with customers giving very encouraging feedback.

In addition, the English authorities have rewarded Smart’s commitment by exempting drivers of electric Smart vehicles from the expensive London congestion charge.

London was selected as the perfect test city due to its high population and infrastructure density, which has resulted in high traffic, parking shortages, severe noise, and pollution. Participation in the project was first offered to companies that operated their own vehicle fleets and those who drive in inner city areas.

Participants lease the electric Smart for four years or 40,000 miles, and the project will officially run until 2012. Interestingly, the majority of the customers who have so far participated in the London-based pilot project approached Smart, not the other way around.

The company is using the test data from this project to assist with monitoring and evaluating the production-specification Smart Fortwo ed, as well as many other different technologies under assessment with the Smart brand.

“e-mobility Berlin”

In addition to the London test programme, Smart is consistently working on the future development of electric drive technology elsewhere.

In September 2008, with the support of the German government and the state of Berlin, Daimler AG and the energy provider RWE introduced the “e-mobility Berlin” project. The two companies are jointly providing the conditions for zero emissions with battery electric drives, which is the world’s largest initiative in this field to date.

RWE is providing 500 electricity charging stations and Daimler is contribution 100 electric vehicles. Both companies aim to provide an intelligent mobility system, and the first joint tests are scheduled for the (northern) spring of 2009.

Additionally, an “on-board unit” is being developed that will communicate with charging stations to ensure that the battery is automatically charged with low-priced electricity when the network is not used to full capacity, for example at off-peak times.

“e-mobility Italy”

Daimler AG is launching its next electric mobility project in cooperation with Enel, Italy’s largest energy supplier.

In 2010, the “e-mobility Italy” initiative will see more than 100 electric cars of the Smart and Mercedes-Benz brands roll onto the streets of Rome, Milan and Pisa.

Enel will be responsible for developing and setting up over 400 charging stations especially for this purpose in the three cities. The project aims to further develop automotive technology and an intelligent infrastructure, and also establish open standards. Infrastructure is a particularly important issue in Italy, where the majority of vehicles are parked in city streets.

Evonik and Daimler establish strategic alliance for the development and production of lithium-ion batteries

Evonik Industries AG, Essen and Daimler AG, Stuttgart are developing the energy storage tool of the future. Based on lithium-ion technology from Evonik and with Daimler expertise, both groups will drive forward the research, development and production of cutting-edge battery cells and battery systems in Germany.

In the near future, Li-Tec cells will appear in electric vehicles of Smart and Mercedes-Benz Cars. This will represent an important milestone in the series production of electric vehicles.

En route to achieving its technological leadership in recent years, Evonik has invested around €80 million. The outcome is production-ready hi-tech battery cells that are superior to competitor products in several key areas.

On 15th December 2008, Daimler AG purchased 49.9 percent of Li-Tec Vermögensverwaltung GmbH (Li-Tec). Evonik Industries AG already holds 50.1 per cent. Both partners are seeking the involvement of a third shareholder in Li-Tec with expertise in electrical and electronic systems integration.

Furthermore, the companies will also establish a joint venture with a clear focus on the development and production of batteries and battery systems for automotive applications. Daimler will hold 90 per cent of this joint venture, and Evonik 10 per cent.

The lithium-ion batteries produced by the joint venture will be used in both the passenger car and commercial vehicle sectors. The capacity available at Li-Tec and the joint venture will initially concentrate on the needs of Daimler AG. Beyond that, the sale of cells and battery systems to third parties is planned.