Autos July 20, 2009, 11:30AM EST

Daimler: The Dawning of the Age of Electric Cars

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The problem, of course, is that there aren't yet many places to tank up with hydrogen. And the environmental benefits are largely canceled out by the lack of an economical and environmentally friendly way to produce hydrogen. (Currently most hydrogen is synthesized from natural gas.)

Electric Cars in the City

Emissions-free vehicles that rival conventional autos in range and cost are, in fact, probably years—even decades—away. But electric cars for city use could come much sooner. Daimler plans to extend the London test to numerous other cities in Europe as well as the U.S. next year. Daimler hasn't decided which cities will get the e-Smarts, but certainly New York and one of California's major cities will be included. Project manager Schweers says he has been flooded by requests from cities wanting to be included.

The company says the London experience shows that the 60-mile range is plenty for most users. The cars proved most useful for commercial fleet customers, who could deploy the Smarts for shorter urban trips and conventional vehicles for longer voyages. By the same token, the electric cars worked well as a second vehicle for families. Most people charged the cars at home overnight, which also makes sense from an environmental point of view. Power plants tend to be underutilized in the late evening. As with the other emissions-free vehicles, Daimler managed to fit the components under the floor, so there was no loss of luggage space (which was never very ample in the Smart anyway).

The next generation of electric Smarts will have more advanced lithium ion batteries supplied by California's Tesla, in which Daimler earlier this year bought a 10% stake. If all goes well, Daimler will begin selling the electric Smarts commercially in 2012. Initially, the numbers will be relatively small but still significant—at least 10,000 units. "The age of electric mobility won't take place all of a sudden," R&D chief Weber cautions. Already, though, "performance has reached a new dimension."

Ewing is BusinessWeek's European regional editor.