It would appear Daimler’s intent to bring its range-extended B-Class E Cell Plus to market is on hold as the company switches attention to a pure EV version using Tesla-sourced battery, control systems and motor.

In 2009 the two companies had signed a technology sharing agreement when the German automaker invested in the Silicon Valley startup and Daimler presently holds 4.7 percent in Tesla.

Last year at Frankfurt, Daimler showed the range-extended version using a three-cylinder gasoline engine to augment about 62 miles electric range provided by on-board batteries, but reportedly U.S. regulations and incentives on pure EVs have prompted Daimler to shelve that project for now, if not indefinitely.

In February, Daimler and Tesla announced they’d be working on a third collaboration together, and it seems this pure EV version may be it. Daimler and Tesla previously shared technology in developing the Smart ForTwo Electric Drive and Mercedes A-Class E-Cell.

The news comes via the German language publication, Automobilwoche, and AutoGuide further speculates it won’t be surprising to hear later this year plans announced to market the Mercedes EV in light of already existent competition from BMW’s ActiveE.

Whether regulations strongly encouraged shelving the extended-range version remains to actually be seen, but given limited range from pure EVs and the premium price an M-B badged vehicle would get, it does leave questions as to why a small, economical range extender would not still make sense.

The B-Class E-Cell Plus shown last September in Frankfurt could travel as far as 372 miles with petrol assist, but if Daimler goes without it, it and Tesla – which has managed to get good range out of its Roadster and Model S already – will have to see how much all-electric range can be feasibly designed in to satisfy requirements of Mercedes’ generally more discriminating clientele.