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

2. 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

3. 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

4. The New Mercedes-Benz: Materials Aluminum Roof Steel QPI SMC QPO SMC Floor Production 50,000 BIW Cost $1996 81% recyclable 22.9 mpg

5. Base Case Comparison New ModelChange Cost$1996-$353 Weight2748 lbs-241.2 lbs Recyclability81%+6.3% ELI10324-561.33 Fuel efficiency22.8 MPG+1.3 MPG

6. Change in BIW Profit by Case Number

7. 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

8. Cost Savings versus Recyclability

9. Cost Savings versus Fuel Economy

10. Recyclability versus MPG

11. ELI Results by Case Number

12. 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

15. 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

16. 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?

17. 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

18. 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

20. Supporting slides

21. Sensitivity without Adjusting Use Phase

22. 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