Michigan Tax Breaks Lure Mercedes Hybrid Development
With a handful of hybrid vehicles planned for the near future, Mercedes-Benz was looking for a base camp in the United States to research and develop its fuel-saving technology. With three potential sites narrowed down to Ann Arbor, Mich., Greenville, S.C. and California, it was Michigan's luring tax breaks that won Mercedes' business. At a time when Michigan unemployment is high and the worldwide automotive industry is weakening, the $7.5 million tax break to Mercedes-Benz will help create an estimated 223 jobs, while helping to bolster that state's automotive industry. Mercedes-Benz Hybrid, LLC, a subsidiary of Daimler North America, plans to build a new facility that is roughly 65,000 square feet at a cost of $9.9 million. According to the Michigan Economic Development Corp., this deal alone will help bring in about $16.2 million worth of revenue to the state.
As European automakers play catch up in the hybrid-electric vehicle (HEV) market, Mercedes-Benz has already announced a pair of planned hybrid vehicles using two distinct hybrid systems, both featuring regenerative braking and start/stop technology.
The Mercedes-Benz M-Class already has the fuel-efficient, 50-state legal diesel ML320 BlueTEC, but starting this year will add the all-new 2010 ML450 BlueHYBRID. The ML450 will mark the first hybrid Mercedes-Benz vehicle in the United States and will feature a direct-injected 3.5-liter V-6 with the Two Mode hybrid transmission setup. This Two Mode Hybrid system, co-developed with General Motors, Chrysler LLC and BMW, will increase the ML450's output to 340 horsepower and 354 lb-ft of torque, giving this hybrid M-Class improved performance and fuel economy. No fuel economy estimates have been released yet, but the ML450 BlueHYBRID should beat the current ML350's estimates of 15 miles per gallon in the city and 20 mpg on the highway. Mercedes-Benz is aiming the ML450 BlueHYBRID directly at the Lexus RX 400h and BMW's all-new X6 ActiveHybrid.
The second hybrid vehicle Mercedes-Benz is planning, which could debut as soon as next year, will be a mild hybrid version of the company's flagship luxury sedan. The Mercedes-Benz S400 BlueHYBRID is aimed squarely at the Lexus LS 600h L, but uses a mild hybrid system instead of the ML450's Two Mode Hybrid system. Unlike the LS 600h L, the S400's mild hybrid system prevents it from being able to run on electric power only, with its main usage coming at cruising speeds or at speeds under 10 miles per hour where it uses start/stop. Official EPA estimates have yet to be announced, but initial testing has indicated that the S400 BlueHYBRID is getting 29 mpg in combined driving. The highlight of the S400's advanced mild hybrid system is the compact design of the lithium-ion battery pack that is roughly the same size as a conventional car battery. The small battery size means that all of the hybrid components fit under the S-Class' long hood without taking up valuable passenger or cargo space. Lexus' LS 600h L comes solely as a long-wheel base layout because its battery pack takes up space between the rear seat and the trunk which moves the rear passengers slightly forward.
To further bolster the automotive technology in Michigan, the state awarded Magna Electronics, a subsidiary of Canada-based Magna International, Inc., with a significant tax break to bring jobs and technology to the state. Magna plans to create approximately 90 jobs in the state by developing products for the growing number of hybrid and electric vehicles.