BERLIN -- Daimler AG said it plans to team up with Robert Bosch GmbH to build motors for electric versions of Mercedes-Benz and Smart cars.
Daimler and Bosch have begun negotiations on a 50/50 joint venture to start production next year, Daimler said on Tuesday.
The manufacturers aim to "accelerate development advances in electric motors" and reduce costs, Daimler said. It plans to install motors from the venture in Smart and Mercedes vehicles starting in 2012.
Automakers are racing to introduce electric vehicles to meet tighter emissions regulations and gain an edge with customers concerned about the environment.
BMW AG, which is developing its own electric motors, created the "i" sub-brand for its electric vehicles and aims to produce the unit's first model, the i3 battery-powered city car, in 2013.
Daimler is designing its vehicles to be powered by conventional engines as well as electric power.
Bosch will sell the motors to other carmakers, Daimler said. The joint venture will have locations in Stuttgart and Hildesheim, Germany, where Bosch currently manufactures electric motors.