(Adds comment from Daimler, background)

DETROIT, Jan 13 (Reuters) - Electric car start-up Tesla Motors Inc on Tuesday said it had been selected by Daimler AG DAIGn.DE to supply battery packs and chargers for an electric version of the Smart minicar.

Tesla founder and Chief Executive Elon Musk said that the privately held company expected to supply components for about 1,000 battery-powered Smart cars initially.

But Musk also told a conference organized by the Society of Automotive Analysts that the supply agreement could run to tens of thousands of vehicles over time.

Tesla markets the $109,000 Roadster, a battery-powered performance car that is one of the first entrants in a segment of the auto market expected to grow quickly as consumers shift from traditional gas-powered engines to reduce carbon emissions and save money.

An electric-version of Daimler’s Smart minicar has been on trial in limited numbers in Berlin and London.

The German car maker expects to launch the battery-powered car later this year in Europe and possibly the United States, said Daimler spokeswoman Julia Englehardt.

In December, Daimler, the maker of the Mercedes luxury line, bought a 49-percent stake in Evonik’s [RUHR.UL] lithium-ion battery unit.

But Englehardt said it would take time to develop Daimler’s own in-house battery technology. In the meantime, she said, Daimler engineers had determined that Tesla had the best available technology for the Smart.

San Carlos, California-based Tesla is also looking for electric car partnerships with one or two other major automakers, said Musk, who became a billionaire from founding the Internet payment service PayPal.

“Sometimes there’s this notion of Silicon Valley versus Detroit, which is completely untrue. We want to work with Detroit,” said Musk.

Tesla ran into a series of cost overruns and production delays with the Roadster before slashing 24 percent of the company’s workforce and launching a $40 million convertible debt financing round late last year.

Separately, Tesla said on Tuesday at the Detroit auto show that it had begun taking orders for the $128,500 Roadster Sport, an even-faster version of the car capable of going from 0 to 60 miles per hour in less than 4 seconds.

Musk said Tesla would unveil a battery-powered sedan known as the Model S at the end of February.

The company has applied for $450 million in U.S. government loans to fund the production of that car and to build a new plant that would supply electric-drive components to other automakers. (Reporting by David Bailey and Kevin Krolicki, editing by Matthew Lewis and Bernard Orr)