FRANKFURT -- Daimler AG on Tuesday said it would book a $780 million windfall from selling its 4 percent stake in rival electric car maker Tesla Motors Inc.
A cooperation agreement to supply Mercedes-Benz cars with Tesla battery technology will remain unaffected by the sale, Daimler CEO Dieter Zetsche said in a statement.
"Our partnership with Tesla is very successful and will be continued," Zetsche said.
The sale of Daimler's stake in Tesla will result in a cash inflow of around $780 million, boosting earnings before interest and taxes by a similar amount for 2014. Proceeds from the sale will be used to strengthen Daimler's operations, the company said.
"We are extremely satisfied with the development of our investment in Tesla, but it is not necessary for our partnership and cooperation. For this reason, we have decided to divest of our shares," Daimler CFO Bodo Uebber said in a statement.
Work on Mercedes electric-drive cars has been completed, and the company said it will continue buying powertrain components from Tesla.
Sales of Mercedes B-Class electric-drive compact car have begun in the U.S. and will start in Europe next month, the company said.
Tesla shares fell as much as 3 percent in New York trading after the news was announced before rebounding to its closing price of $235.34 at 4:52 p.m. ET. The company's shares have gained 56 percent for the year through the close of regular trading Tuesday.
Reuters and Bloomberg contributed to this report.