In February Tesla confirmed it would work with Mercedes-Benz on a third electric car project, the first two being the Smart ForTwo Electric Drive and Mercedes-Benz A Class E-Cell.

According to latest reports, that third project will be an electric version of the latest-generation B Class, and will be aimed primarily at the U.S. market.

Mercedes-Benz’s parent company Daimler is a major shareholder of Tesla, and as part of its original share purchase deal back in 2009 the German auto giant gained access to Tesla’s battery technology and technical expertise needed to bring electric cars to market.

Now, Daimler will use that expertise to launch an electric Mercedes-Benz B Class in 2014.

"We want to bring another battery-powered vehicle to the market," a spokesman for Daimler revealed to Automobilwoche.

Tesla will reportedly supply the battery, electric motor and control systems for the vehicle.

Mercedes-Benz had originally planned to launch an extended-range electric B Class and even an unveiled a concept version at the 2011 Frankfurt Auto Show. However, perhaps buoyed by Tesla’s apparent success with the Model S, as well as more favorable classifications and higher incentives for pure electrics, the spokesman said plans for the extended-range B Class had been put on hold in favor of the all-electric route.