Hybrid technology will be profitable for Mercedes-Benz the instant its Hybrid S400 S-Class debuts in the U.S. in September, executives insist. While Toyota is known to have absorbed enormous losses to keep its Prius Hybrid at the forefront of the green revolution, that’s not an approach Benz favours.

Even though the Hybrid S400 will be the first car in the world to use Lithium-Ion battery technology to drive its electric motor, Daimler has no intention of sacrificing profit to establish a Hybrid beach head.

“It is still our target to be profitable with all of our hybrid vehicles straight away,” the head of Mercedes-Benz’s Research and Development, Dr Thomas Weber insisted told Leftlane.

Hybrid technology may be a fuel saver in cities, but running two engines (petrol or diesel, plus an electric motor) adds weight, cost and complexity.

“Looking to the productions costs, you are putting two engines in one car and it’s clear that the majority of Hybrid cars will be gasoline based because gasoline engines cost less than diesel engines,” Dr Weber explained.

“Most hybrids have a price premium but the question is whether the premium is enough to earn money.”

“On smaller cars, that answer is ‘no’ right now, but we are developing modular architecture for hybridization and we believe it will be possible to be profitable straight away.”

“It’s important to deliver more than fuel consumption as the core of the car, even if it is a hybrid,” Dr Weber insisted.

“Also, we can’t just add cost with the products. We have to reduce cost somewhere else or the customer will pay more.”

While the Japanese car companies have gained environmental kudos for their hybrids, the Europeans have shied away from the technology, insisting that, in the real world, diesel engines offered better fuel consumption results at lower prices. While hybrids deliver strong economy benefits in stop-go traffic, their figures on highways are much less convincing.

“It’s important that we decide what are the key technology fields where we want to have a leading position,” Dr Weber explained.

“It will not be possible for a brand to have a leading position in every field. That was our strategy before, but now we have to decide what are the inventions that add value to the customer.”

Words by Michael Taylor.

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