Mercedes Takes Hybrid Lead Among European Carmakers

October 8, 2009

It looks like Mercedes has caught hybrid fever. In August, the company launched its Mercedes S400 mild hybrid—the first hybrid from a European automaker and the first hybrid vehicle to use a lithium ion battery. Even more impressive, Dieter Zetsche, CEO of Daimler, is promising a hybrid version of each of Mercedes’s high-volume cars and a plug-in hybrid in 2012.

The $89,000 Mercedes S400 mild hybrid began arriving in US showrooms in August. The S400 hybrid is the lowest-price model in the S-class range—and yesterday was awarded a federal tax credit of $1,150 awarded this week. At the same time, the S400’s mileage rating of 19 mpg in the city and 26 on the highway is 30 percent more fuel efficient than the more expensive S550. Efficiency gains come from the 120-volt battery pack, which is neatly packaged in the engine compartment—unlike other hybrids that use trunk space for the batteries.

The tradeoff of efficiency for horsepower reflects a shift in the luxury market. The Mercedes S550 delivers 382 horsepower versus the S400’s 275 hp. “I am convinced that many customers continue to want a comfortable and spacious car. They would not like to be called callous by their neighbor because the fuel consumption is astronomic,” Zetsche said in an interview with Automotive News. “We have to provide fun without pain by being able to offer these kinds of attributes in a vehicle and with lower fuel consumption.”

Mercedes-Benz will trumpet the S400 hybrid in a green ad campaign beginning in early 2010. Mercedes expects the S400 hybrid to account for 10 percent of S-class sales—which will add up to about 2,000 sales in a year.

Mercedes Plug-ins On the Way

More Mercedes hybrids are headed into production. A Mercedes M-class hybrid SUV, the ML450 Hybrid, with an expected fuel economy of 21/24, is scheduled to arrive by the end of this year, and hybrid gas-electric versions of the C and E classes are expected in the next year or two. When the S class is redesigned in 2012, Mercedes will launch the S500 plug-in hybrid with close to 20 miles of all-electric range, thanks to a 10 kilowatt-hour lithium battery pack.

Dieter and Nicolas

Dieter Zetsche, CEO of Mercedes, with French President Nicolas Sarkozy at the Smart plant in Hambach, France. They announced expanded production of the all-electric Smart ForTwo. The French government is investing in the project.

Mercedes is not going to stop with a plug-in hybrid. The company wants a pure electric car and fuel cell vehicle on the market in the next few years. Zetsche views all of these electric-drive technologies as a continuum. “It starts with the stop-start unit, goes from a mild hybrid to a full hybrid, and then you come to a standard where it flip-flops—electric is the main power and combustion is an add-on,” said Zetsche. “It ends with electric, be it fuel cell or battery electric.”

Daimler today announced that it selected Hambach, France, as the location for future mass production of the electric version of its Smart ForTwo. “The smart ForTwo Electric Drive proves that emission-free driving in an urban environment is already feasible today,” Zetsche said. Initial production of 1,000 vehicles will begin this year—for test evaluation in Europe and the US—with “series” production of the Smart ForTwo Electric Drive (ED) expanding in 2012.

Zetsche believes that it’s too risky to bet on any single technology. “This will be a gradual changeover from one technology to the other. In between, there will be hybrids and plug-in hybrids for quite some time.”


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  • Nelson Lu

    “Takes Hybrid Lead Among European Carmakers” is like “Takes Reliability Lead Among Chinese Carmakers.”

  • Charles

    $1,150 tax credit for 19/26/21 MPG (on premium), what a crock. At a price of $89,000 I will be willing to bet that most buyers have to pay the AMT, which I think disqualifies the buyer for the tax credit.

    Here are specs for some large cars:
    The Toyota Avalon (268 HP) has a combined MPG of 23.
    Ford Taurus (263 HP) 22 MPG or the all wheel drive SHO (365 HP) and combined MPG of 20.
    Chevy Impala (211 HP) 21 MPG.
    S400 (275 HP) 21 MPG combined.

    None of them are hybrids. The Avalon has an above average predicted reliability from Consumer Reports, all the others are average.

  • Lost Prius to wife

    There are people that will always be buying a Mercedes. Now they may buy $89,000 Mercedes S400 mild hybrid rather than the more expensive S550. Yes, this car is way beyond the average person’s budget, but not beyond everyone’s budget. If one really has earned the money required to buy a Mercedes, and they want that kind of luxury, they can now choose to use 30% less oil. Again, the whole point of this site is to make a dent in our oil usage and car emissions. This car does that for the luxury car market.

  • Lost Prius to wife

    Maybe a better point to make here is: How many “average Joes” will be going out and buying a Honda Insight, a VW Jetta TDI, or a Toyota Prius? How many of those “average Joes” will be saving 30% more in oil usage rather than buy into the same old car or truck mileage? We applaud people that buy a 2010 Ford Escape Hybrid 4WD over a regular 2010 Ford Escape 4WD, but that is no different than the Mercedes – they both decrease oil usage 30%. Then why did we not applaud the Mercedes purchase?

  • Charles

    I do not applaud conspicuous consumption. The article states a 30% improvement, but the EPA has it at only 22%. I may have applauded 22% if it was 22% above non-hybrid large cars, but it is 22% above a poor mileage car. As stated the Avalon and Taurus get better mileage and are as large and very close to as powerful. The all wheel drive Escape Hybrid is 31% more efficient when compared the non-hybrid version. Why compare hybrid and non-hybrid versions? The comparison should be to the best of the non-hybrids. For the Escape Hybrid that would be its 29 MPG vs the RAV 4′s 24 MPG. So the Escape Hybrid is about 21% more efficient. The S400 vs the Avalon, shows the S400 at almost 8% lower MPG.

  • Jeff

    Charles, the S400 and Avalon aren’t in the same class. Yes, the Avalon gets better mileage than the S400, but the S400 is in a top luxury category, and the Avalon just isn’t. I can’t imagine anyone who is willing to buy a $90K Mercedes is ever going to purchase a $40K Toyota. That’s just a fact. It has to be an apples-to-apples comparison. Now, if you want to compare the Lexus LS460 (hybrid or non-hybrid) against this S400 mild hybrid from Mercedes, then I think that’s a valid comparison.

  • Charles

    Jeff, I agree that the S400 is a luxury car, and the Avalon is just a very nice car. With that said, the Avalon is about the same size and power. I also am trying to point out that the S400 should not have a tax credit because its MPG is just not high enough to encourage people to buy it. Not that a 1.3% discount is much encouragement.

    So to be fair, the S400 gets almost 5% better MPG when compared to the all wheel drive and much more powerful Lincoln MKS. The S400 beats the Lexus LS 460 by almost 10%.

    I still think such low MPG cars should not have incentives from our government.

    A non-green side note, the MKS runs on regular, not premium like the S400. So according to the EPA the MKS will cost less for fuel.

  • alancamp

    It seems like Mercedes is selling a ‘Hybrid’ in name only. As a luxury car owner, I would be embarrassed to drive a car that only gets 19/26 with a big Hybrid sticker on the back. GM and Chrysler already tried this same ‘mild’ concept and failed. It’s the equivalent of ordering a Whopper, large fries and a diet Coke.

    In their other vehicles, going to a V6 instead of the big V8 seems to increase the fuel consumption at least 3 mpg city all by itself. So this ‘Mild Hybrid’ seems to be just a way for Mercedes claim to have a hybrid, when they are still waiting to see if hybrids can be profitable. The only thing the S400 has going for it is a slightly lower intro price for an S Class of $3,650.

    The Lexus LS is the worst. For $38,000 more for the ‘hybrid’ LS AWD, you get 3mpg more in the city, and 1 ‘less’ mpg highway. They sold 12 cars in the US for September. Not sure how many are born every day, but at least 12 were alive in the month of September.

  • Cory

    It is a crock. I purchased one of the first Tahoe hybrids with a $2500 tax credit. What they didn’t say is if you can afford a car this expensive, you won’t qualify for the credit. When I filed my taxes, I ended up with nothing!