Mercedes-Benz: A Greener Luxury Sedan Stephanie Dalquist Seward Matwick Bill Nickerson 13 May 2002

Mercedes-Benz Strategy Manufacture world-class luxury cars Maintain industry leadership in technology and design Maximize profits, delivering consumer and environmental benefits “Resource management” value system –Free market: get the prices right –Technology is the answer: improved efficiency, recyclability –Earth as a closed system

Impact on Design Goals Profitability first –A corporation, above all Deliberate material selection –Aim to meet new EU mandates –Improve fuel efficiency EPS to confirm design choices Balance the competing mandates while still achieving profitability

The New Mercedes-Benz: Materials Aluminum Roof Steel QPI SMC QPO SMC Floor Production 50,000 BIW Cost $ % recyclable 22.9 mpg

Base Case Comparison New ModelChange Cost$1996-$353 Weight2748 lbs lbs Recyclability81%+6.3% ELI Fuel efficiency22.8 MPG+1.3 MPG

Change in BIW Profit by Case Number

Recycling Calculations Everything the dismantler gets is reused/recycled Fluid weight is included in the weight of the total vehicle F and NF recycle at 90% Plastics are not recyclable Weight saved from base case counts toward reuse/recycle requirement

Cost Savings versus Recyclability

Cost Savings versus Fuel Economy

Recyclability versus MPG

ELI Results by Case Number

EPS Results Difficult and complex tool –Many use, but few understand Requires considerable data input Requires interpretation –Emphasis on use phase, specifically CO 2 –Regional differences, environmental impact not same

Policy Recommendations Getting the price right –Increase gasoline taxes to attack use phase Improving recycling, push from both ends –Manufacturing/development and End of Life –Market for recycled materials Cooperative environmental push to create fair, reasonable policies –Manufacturers, policy makers, recyclers

Recycling Comments Law states: minimum of 80% reuse and recycling by average weight per vehicle and year Currently, penalized for weight reductions in cars How to handle fluids, weight savings, and plastics?

Experience and Challenges Recycling calculation policy has strong impact on materials selection EPS confirms, not decides Stay on the cutting edge of technology and profitability Meet 2006 recyclability mandates of the EU Improve fuel efficiency

Conclusions Mercedes will remain faithful to its priorities: the consumers and shareholders, the law, and the environment Mercedes will overcome design and legal challenges to lead the automobile well into the 21 st century Mercedes will maintain competitive edge while pursuing cooperative endeavors

Supporting slides

Sensitivity without Adjusting Use Phase

Graph explanation Legend: ELUs of all 54 options Change # –1: original ELU –2: -10% ELUs –3: -30% ELUs –4: -50% ELUs –5: 50% ELUs –6: 30% ELUs –7: 10% ELUs –8: - biodiversity ELUs –9: - production ELUs –10: - energy ELUs –11: - health ELUs –12: - biodiversity/production ELUs –13: - energy/health ELUs