Dan Neil:

The B-ED is, realists would note, a “compliance car.” The phrase refers to a low- or zero-emission vehicle model, built in whatever numbers necessary to satisfy some portion of California’s clean-vehicle quota and typically sold only in California and 10 other clean-air states. The California Air Resources Board obliges major manufacturers to sell an incrementally rising percentage of advanced technology ZEV cars even if, and most assuredly when, they lose money on them.
 Compliance cars put something of a strain on auto makers’ communications departments, because the unspoken truth is so, um, unspeakable. So let’s divide the B-ED’s media debut last week in Silicon Valley into text and subtext. The subtext was regulatory compliance, and of a very expedient variety, too: Rather than rely on in-house R&D, Mercedes essentially contracted with Tesla—the Silicon Valley car maker and acknowledged leader in electric automobiles—to provide the EV architecture (motor, transmission, battery, power electronics) for its electron-fired B-Class.
 The B-Class ED is the product of a technology-sharing alliance between Tesla and Daimler that goes back to Mercedes’ 2009 investment. Tesla will make the B-Class battery pack, power management system and thrashy bits at the factory in Fremont, Calif., and ship them to Germany for final vehicle assembly.

Via Steven Sinofsky.