Although early reports suggested that Daimler AG was ready to kill off its microcar Smart brand, a new announcement has now taken its death was off the table.
According to a statement issued by Daimler, the carmaker is partnering with China-based Zhejiang Geely Holding Group to form a 50-50 globally focused joint venture to transform Smart into a leading brand of premium electric vehicles.
Under the joint venture agreement, a new generation of Smart electric models will be styled by the Mercedes-Benz Design network, with engineering from Geely global engineering centres, and assembled at a new purpose-built electric car factory in China.
It's not clear if Smart's injection molded thermoplastic body panels will be a part of that new car.
Calling Smart a brand with "unique appeal and strong commercial value," Geely noted that further development of the microcar will include technologies such as connectivity, in line with the transformation the industry is undergoing.
The board of directors of the new Smart joint venture will be made up of six executives with equal representation from both parties.
Global sales of the new Smart are due to begin in 2022, with a new plant to be built in China. Until then, Stuttgart, Germany-based Daimler will continue to produce the current generation of Smart vehicles at its Smartville plant in Hambach, France, and at Novo Mesto, in Slovenia.
In addition, it was announced that separately, Mercedes-Benz will produce a compact electric vehicle under the new product and technology brand EQ at the Hambach plant. To that end, a further investment of 500 million euros ($562 million) will go into the facility, to underpin its new role in the Mercedes-Benz Cars production network.