The new electric model will come to select states this summer.
Mercedes-Benz and Tesla Motors have teamed up for the new B-Class Electric Drive model that the German carmaker debuted this week.
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Featuring a battery developed by Tesla, the new electric Mercedes is coming to select U.S. markets this summer and has been priced at $41,450, the Silicon Valley Business Journal reported.
The B-Class Electric Drive offers 174 horsepower and a driving range of 100 miles on a single charge, according to the automaker. The four-door electric compact should be available nationwide in early 2015.
Mercedes has ties to Tesla through its parent company, Daimler, which has a "small ownership stake" in the California-based startup. Developing batteries for other carmakers could potentially be a long-term business for Tesla; the company is currently working to build a large battery plant somewhere in the Southwest.
Looking at Arizona, Nevada, New Mexico and Texas for a site, Tesla plans to eventually make 500,000 battery packs every year in the plant, a figure that would match current international production.
The Tesla "gigafactory" to produce lithium-ion batteries will cost $5 billion to build and be the largest battery factory in the world when it's completed, Bloomberg Businessweek reported.
The Palo Alto, Calif.-headquartered automaker is reportedly looking to break ground in two states before likely picking just one location for the plant.
The new factory is expected to employ 6,500 workers and will boost the local economy wherever it's built. Essential to the vision of a less expensive Tesla vehicle, the factory will produce batteries that are 30 percent cheaper than those available right now.