Mercedes-Benz: A Greener Luxury Sedan

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 Weight 2748 lbs -241.2 lbs Recyclability 81% +6.3% ELI 10324 -561.33 Fuel efficiency 22.8 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 CO2 • 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 21st century • Mercedes will maintain competitive edge while pursuing cooperative endeavors

20. Supporting slides

21. Sensitivity without Adjusting Use Phase

22. 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 Graph explanation