Daimler Plowing $3 Billion Into Diesel Development

Daimler AG plans to invest 2.6 billion euros, nearly $3 billion, in a new line of diesel engines even as it prepares to launch a new battery-electric vehicle that can go 300 miles on a single charge, Chief Executive Officer Dieter Zetsche told the company’s annual shareholders meeting in Berlin.

Daimler is moving ahead with the investment even as Volkswagen AG has been caught up in a massive scandal for trying to evade the emission standards for diesel engines now in place in the U.S., as well as countries such as South Korea and Mexico.

Despite the current discussion about emissions, Zetsche said Daimler will continue to develop its diesel technology. If traffic-related carbon dioxide emissions are to continue to fall in the short term, diesel engines are essential. That’s why Daimler is investing billions in a new generation of highly efficient diesel engines.

For many years, Daimler has actively supported the introduction of new measuring methods with the aim, among other things, of converging as far as possible cars’ fuel consumption in test conditions and in real driving, as deviations can occur between measurements in these two driving modes, he added, noting the company will face both higher standards and more difficult tests in the years to come.

In addition, China, which has now emerged as the single largest market for Mercedes-Benz cars, also has been reluctant to adopt diesel engines for passenger vehicles.

Zetsche, however, said Daimler is "systematically working" on the further development of alternative driver systems. The company is investing approximately 500 million euros, or nearly $570 million, in the construction of a second battery factory in Germany.

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