Daimler started sales and production of its first mass-market electric car today, beating BMW with the introduction of an emission-free model.
Daimler began assembly of the battery-powered Smart ForTwo at its Hambach, France, factory, which has gotten an upgrade worth more than 200 million euros ($251 million), the automaker said in an e-mailed statement.
Deliveries of the ForTwo EV will start later this year. BMW plans to introduce the full-electric i3 next year.
"We are making significant investments in the Hambach site" for the electric-powered Smart and the next generation of the city car, Annette Winkler, head of the Daimler's small-car brand, said in the statement. "I am convinced that this is money extremely well invested."
The electric version of the two-seat microcar, which is built on the same production line as counterparts with combustion engines, has a range of 145km (90 miles) before needing to be recharged.
Unlike other automakers, Daimler will offer customers the choice of leasing or purchasing the battery. The Smart EV starts at 18,910 euros if the battery is leased at a cost of 65 euros a month. The car's starting priced is 23,680 euros if the battery is purchased.
Renault will lease the battery pack in the Zoe for 80 to 100 euros a month, which will allow it to offer the subcompact for a starting price of 15,700 euros when it goes on sale later this year. The annual production capacity for the Zoe is 150,000 units.
Renault also leases the battery in the Kangoo ZE, Fluence ZE and Twizy. Its policy contrasts with that of other carmakers in Europe, which sell the batteries along with their electric cars. EVs sold along with their batteries include the Mitsubishi i-MiEV, Nissan Leaf, Peugeot iOn and Citroen C-Zero.
Those carmakers are bundling the cost of the battery along with their EV models to simplify the total cost for the customer, said Ian Fletcher, an analyst for IHS Global Insight.
But simplicity comes at a cost as electric cars with leased batteries will have a higher residual value, according to consultancy EurotaxGlass's, which tracks used-car prices.
In May, the company estimated that the Leaf would retain 35 percent of its value after three years and 36,000 miles (about 57,940km), compared with 54 percent for a comparable EV with a leased battery.
Douglas A. Bolduc, Bruce Gain, Nick Gibbs and Bloomberg contributed