I did quite a lot of research on the web and tried a few settings, but I couldn\'t reproduce the behavior of running MsTest in Visual Studio 2012 on the command line.
After more searching we changed to use the test console runner that is included with VS2012:
VSTest.Console.exe Tests\bin\Tests.dll /Framework:framework40 /Settings:LocalTestRun.testrunconfig
This works with a relative path as applicationBaseDirectory.
applicationBaseDirectory