BMW has been hedging its bets on alternative powertrains with a succession of hydrogen-powered concept vehicles, but perhaps now sees the move by its archrival Mercedes to develop hybrids as too big a leap forward in technology to let go unanswered. For its part, DaimlerChrysler, which was charged with developing the rear-drive luxury hybrid powertrains in its pact with GM, could save some money at a time when it needs the cash on hand to pump up Mercedes' quality drive and to figure out what to do with the mess at Smart.
Late last month, General Motors and DaimlerChrysler signed their long-brewing deal to develop hybrid cars together. Announced last December, the deal split hybrid development between the two companies. DaimlerChrysler will take the lead for rear-drive luxury cars, while GM will be responsible for developing the hybrid system to be used in trucks, SUVs, and front-drive cars and crossovers. The two-mode hybrid system is expected to boost fuel economy in vehicles up to 20 percent. The first vehicles to receive the systems in 2007 are the Chevrolet Tahoe/GMC Yukon sport-utes, followed by the Dodge Durango.