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Coming Soon: The Tesla-Based Mercedes

Tickers in this article: DAI F GM TM TSLA
NEW YORK ( TheStreet) -- One year from now, Mercedes will launch its all-new electric car that has been co-engineered with Tesla (TSLA) .

What is this car, and why is Mercedes staking its future on Tesla?

One occupational hazard of living where Tesla test-drives its cars under development is that as long as I'm not asleep or fetching stuff from the basement, all I need to do is to look out the window and every few minutes I will see these cars passing by. So for over a year now I have been looking at the future Tesla-based Mercedes as often as every hour, whether I like it or not.

Sometimes, the Tesla-based Mercedes test cars are parked on a public street. I took this picture (among many) last October:

This Tesla-based Mercedes is of a similar size and shape as Ford Motors' (RIMM) C-Max, which is sold as both a regular hybrid and as a plug-in hybrid version -- and which I recently drove 1,247 miles in a high-speed endurance test.

In other words, it's a short and somewhat tall station wagon.

Obviously, unlike the Ford C-Max, this Mercedes is a pure electric car. The batteries are, just like in the Tesla Model S, laying flat inside the floor, which is about 5 inches to 6 inches thick.

Tesla also helped Toyota bring to market an all-electric version of its very popular RAV4 small/medium-SUV. Only 2,600 of those cars are being made, and sales started last September. I have driven this outstanding Tesla-based Toyota (TM) on multiple occasions.

I highly recommend the Toyota RAV4 electric to anyone interested in an all-electric car, and for whom 110 miles of range will fit the intended purpose.

The main difference between the Toyota and the Mercedes is this: In the case of Toyota, Tesla took an existing car and re-designed it to make it an all-electric car. In the case of Mercedes, it looks like Tesla took part in the engineering from Day 1 and is therefore able to better optimize the car for all-electric duty.

How will this manifest itself in terms of differences between the Toyota and the Mercedes? The Toyota has a 42-kW battery, and judging from crawling under the Mercedes on a reasonably clean street, I'd say the Mercedes has a 36-kW battery.

42 kW vs. 36 kW: So does this mean the Mercedes will have slightly less range than the Toyota's 110-mile average? Not necessarily. There are a couple of reasons for this:

1. The Mercedes is a more aerodynamic car and sits lower to the ground. Once you start going above 50 miles per hour or so, aerodynamics matter more, and this should help the Mercedes perform more economically than the Toyota, especially on the freeway.

2. Seeing as it appears Tesla was part of the engineering of this Mercedes from Day 1 as opposed to it being an engineering after-thought, it should be able to optimize the weight of the car better. I would not be surprised to see the Mercedes be at least 200 lbs lighter than the Toyota. This should compensate for the smaller battery in the Mercedes.