Cost won't stop Mercedes-Benz delivering a huge near-future lineup of diesel, hybrids, Diesotto and, later, fuel-cell cars, Daimler chief Dieter Zetsche says. Whereas GM's Bob Lutz says cars will get far more expensive if they're to meet fuel economy standards, Zetsche takes a different line.

"I hear some competitors speculating that whatever it costs to meet the targets, that will be transferred to the customer. But since this is a legal requirement in order to sell the cars, the willingness of the customer to come up with the full bill will be limited. I consider the realistic definition for the pricetag is that the [customer's] investment has a payback as a fuel saving during the first three or four years of the vehicle's life."

Like Toyota, Mercedes will make its leading edge Green car special. "We learned from the Prius that for a new technology it is essential that the neighbor asks 'What are you driving there?' in order to create the hype. So we would have to make it clearly visible. You don't do that when you're making one a day but when you get to volumes I'm talking about, the body would be significantly different from other vehicles.

Mercedes will begin producing one fuel cell B-Class per day in 2010, Zetsche said. He believes it can be economically feasible and competitive with conventional cars. "Today we are convinced by 2014 or '15 we can offer fuel-cell vehicles that compete technically and on price with conventional powertrains, in the range of 100,000-plus units a year. It's a stretch but realistic target." Mercedes won't wait for a hydrogen infrastructure. It's in discussions with such power-generation companies as Linde. "One percent of today's hydrogen production would fuel 5-million fuel cell vehicles, so it's not a totally new world."

Mercedes is making progress on the Diesotto engine, Zetsche said at the Geneva Show. It is composed of a suite of technologies, the last of which is its variable compression ratio, "which is the toughest step to execute, involving a lot of investment." Mercedes can get about 85 percent of the improvements without it in three to five years he says, with variable compression ratio seven years away.

The S-class Bluetec hybrid is two years off. "The diesel Bluetec has a cost premium over less-clean diesels." Mercedes will offset part of the engine's cost with "efficiency gains" in the rest of the car and some cost passed on to customers. Lower refueling costs will offset the higher price, he says. "But we will protect our intended margin of 10 percent while selling this kind of vehicle."

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