"We are extremely satisfied with the development of our investment in Tesla, but it is not necessary for our partnership and cooperation," Daimler CFO Bodo Uebber said in a statement.
Tesla shares fell 1.2 percent in after-hours trading. Daimler said it expects the sale to generate around $780 million in cash.
At one point Daimler held just over 9 percent of Tesla, though that stake has diminished over the years.
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