Mercedes Wants Hybrid Tax Break For New Diesels

Mercedes Wants Hybrid Tax Break For New Diesels

By John O'Dell June 24, 2008

'09 Mercedes-Benz ML 320 BlueTEC may get same tax perk as a hybrid.

By Bill Visnic, Senior Editor

Officials at Mercedes-Benz USA are crossing their fingers that their upcoming diesel-powered ’09 models – the ML 320 BlueTEC, GL 320 BlueTEC and R 320 BlueTEC – will enable buyers to claim the same federal tax credit as is currently available to individuals who buy certain hybrid-electric vehicles.

The Environmental Protection Agency is considering Mercedes’ assertion that the new 50-state-legal, diesel-engine Benzes should be in the same category as hybrids that qualify for the federal Alternative Motor Vehicle Credit. Mercedes officials seem confident the diesels will, in the eyes of the EPA, be seen as equally “clean” as hybrids.

“We are waiting for final approval (from the EPA),” said Stephen Cannon, MBUSA vice president, marketing.

A Hefty Premium?

For now, Mercedes is mum on the final price of the diesel-powered SUVs and the R-Class wagon-type-thing, which go on sale in October. The current diesel “premium” for 44-state-legal  ML, GL, and R vehicles is $1,200 – but the coming ’09 BlueTEC generation adds the purportedly costly AdBlue urea-injection system and an additional selective catalytic reduction converter to scrub oxides of nitrogen levels down to the federal Tier 2, bin 5 and California LEV II emissions standards that make the vehicles legal for sale in all 50 states.

Mercedes will not provide a precise figure, but the additional cost of that emissions equipment is thought to be substantial.

No-Touch Urea System

Thomas Ruhl, director of development for the R-Class, SUV Hybrid and BlueTEC, told Green Car Advisor that Mercedes believes owners never should have to sully their hands by handling the AdBlue urea for the SCR system.

The ML 320 and R 320 BlueTECs have tanks under their cargo floors that carry seven gallons (26.5 liters) of AdBlue; the GL 320’s tank holds 8.5 gallons (32 liters).

Ruhl said that because a liter of AdBlue is good for about 1,000 km (621 miles) of NOx-scrubbing action – and service intervals for the new diesels are at 10,000 miles – it’s almost impossible that owners would need to replenish the fluid between visits for scheduled maintenance.

Quick Payback Promised

Mercedes executives also remain cheerful about payback times – despite the unnerving and disproportionate leap in the cost of U.S. diesel fuel.

Company execs says even at current ballooned diesel-fuel prices, the payback time for the new BlueTEC diesel models will be roughly two-thirds that of a “typical” hybrid. And at price parity with premium-grade gasoline – where Mercedes predicts diesel fuel soon will settle – payback time will be about half that of a “full” hybrid.

Part of Mercedes' payback equation is the diesel vehicle's fuel economy: the ML- (right) and R- Classes'  210-horsepower turbodiesels are good for 18 mpg city and 24 mpg highway while the gasoline-engine ML350 does 15 mpg city/20 mpg highway. They also deliver 398 pound-feet of torque. The larger GL 320 BlueTEC delivers 17 mpg city and 23 mpg highway.

Benz Hybrid Coming

Finally, Merc  executives say the company will sell its own hybrid in the U.S. beginning in the 2009 calendar year.

Although Mercedes showed the diesel-engine Vision GLK BlueTEC hybrid concept at this spring’s Geneva motor show, the first hybrid in the U.S. is likely to use a gasoline engine. The company's gasoline-engine hybrids will be known as “BlueHybrid” and diesel hybrids will be called “BlueTEC Hybrid.”

Visnic, a frequent Green Car Advisor contributor, is a senior editor for Edmunds AutoObserver

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.