German car giant Daimler is to expand its partnership with Bosch in the development and production of electric motors and all-electric vehicles in Europe.

The firm, which owns the Mercedes-Benz and smart brands, has signed a letter of intent with the auto technology company and has now begun negotiations to establish a 50:50 joint venture that should be concluded in the first half of 2011.

Together, the companies aim by bundling their competencies, to accelerate development advances in electric motors as well as to make accordant synergies accessible. According to their letter of intent, joint production should start in 2012.

The electric motors developed are planned to be used in Mercedes-Benz and smart electric vehicles from next year, while Bosch will handle any potential sales to other car makers once the motors are produced.

The Bosch Group is a leading supplier of technology and services to the automotive sector. It has a high level of competence in developing and producing electric motors, which it is already manufacturing in series in Hildesheim.

Meanwhile, Daimler is known for its development of electric and fuel cell car prototypes including the smart fortwo EV,  Mercedes-Benz F-Cell,  A-Class E-CELL and the Vito E-CELL van.