Tesla CEO, Elon Musk, has confirmed the rumors that have been lighting up the blogosphere for months. The start-up electric car company will supply its lithium ion battery packs and charging systems to the Daimler Group for use in the upcoming Smart ED. The agreement was announced at the Society of Automotive Analysts outlook conference today.

The Smart ED is an all-electric version of Smart's diminutive Fortwo with an estimated range of between 70 and 100 miles for every 8-hour charge. Daimler expects to build 1,000 Smart ED test mules this year, exporting some to the US by 2010.

An unconfirmed report by Edmunds says the deal may go beyond batteries, as Tesla spokesperson, Rachel Conrad implied that Tesla would supply Daimler with the entire electric powertrain. Edmunds has confirmed that this deal applies only to batteries and chargers.

Ms. Conrad also told Edmunds that Tesla is working on another deal with a major automaker. Which automaker this is hasn't been disclosed. (Count one vote for "Any American Automaker," please.)

Source: Autoblog, Image: Carpages