European luxury-car makers expect the hybrid vehicles they begin rolling out this year to sell in low volumes.
Mercedes will launch two hybrids this year. But Ernst Lieb, CEO of Mercedes-Benz USA, said, "I don't think we will sell a big number of either.
"There will be a price premium on the cars -- higher than on diesels -- to recoup some of the expenses," he said.
Mercedes charges a premium of about $1,500 on its diesel models.
The company's S400 BlueHybrid sedan, due in September, will be the first European hybrid sold in the United States. It is a mild hybrid that uses an electric motor to boost fuel economy in city driving rather than provide propulsion on its own. The motor is powered by lithium ion batteries developed by Johnson Controls-Saft.
Later in the fall, Mercedes will launch the ML450 SUV with a Two Mode hybrid powertrain. The ML450 hybrid will use nickel-metal batteries and can be driven on electric power alone up to speeds of around 31 mph. General Motors, BMW, Daimler and Chrysler LLC developed the Two Mode transmission in a joint project two years ago.
Although sales are expected to be low, Lieb said Mercedes thinks it is important to have a hybrid on the market to test the waters. Daimler CEO Dieter Zetsche has promised that hybrid versions of each of Mercedes' volume cars will be rolled out in the coming years.
Because of low fuel prices, BMW isn't convinced that penetration of coming hybrid versions of its X6 crossover and 7-series sedan will exceed 10 percent. The X6, with a Two Mode hybrid powertrain, goes on sale at the end of the year. In June 2010, a mild hybrid version of the 7 series goes on sale.
GM builds the Two Mode transmissions for Mercedes and BMW.
"In terms of volume, we don't expect a lot," said Jim O'Donnell, CEO of BMW of North America. "If you have gas at $2 a gallon, why would you invest another $2,000 or $10,000, depending on the technology?"
Next year Porsche is expected to launch a hybrid version of its Cayenne SUV. Audi plans a Q5 crossover hybrid for 2011, while Volkswagen is working on a hybrid Touareg SUV for late 2010 or early 2011.