The large ring terminal on the end of the red braided wire, attaches to the back of the alternator (the larger stud). It feeds power to most of the electrical system and recharges the battery. The small lug on the case of the alternator is ground. A separate, small, bare, braided wire attaches to it. With the original alternator you should not have a spade connector? I assume yours is a 230SL which is different from the later W113 alternators.