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Mercedes will show off an electric SUV concept car in late September Reuters

Mercedes owner Daimler has set out plans to significantly increase its production of electric, hybrid and hydrogen fuel cell vehicles, and is targeting over 100,000 electric sales per year by 2020.

Following the trend of other traditional car makers waking up to the threat posed by Tesla and Chinese start-ups, Daimler says instead of going all-electric, it will focus on plug-in hybrids, electric and hydrogen vehicles across its passenger car and commercial vehicle brands, as well as continuing to refine petrol and diesel power.

"We will invest €14.5bn (£11.5bn) in research and development in the next two years alone − more than half of it will again be spent on green technologies. Just for our passenger cars, we are talking about €5.4bn," said Prof Dr Thomas Weber, member of the board of management of Daimler.

The German company plans to launch four new electric cars under the Mercedes brand in the near future, and the first of which will be revealed at the Paris motor show in October. Daimler also has plans to electrify its Smart range of small two- and four-seat city cars.

Several of these new vehicles − especially the larger Mercedes saloon cars − will share the same "electric vehicle architecture", a platform developed by Daimler to easily fit electric motors and an enormous battery pack to several different cars. Tesla employs a similar sharing system, by giving the Model S and Model X the same chassis, electric motors and battery.

As for plug-in hybrids, where a petrol or diesel engine is supplemented by a battery pack and electric motor, Mercedes will release two new models soon − the GLC Coupe 350e and the E350e. These cars are hybrids, but are likely to struggle to travel for more than 20 miles or so on electrical power alone. A much longer range will comes from the Mercedes GLC F-Cell, an SUV powered by a hydrogen fuel cell that will go on sale in 2017.

Both hybrids and all-electric platforms will also be developed for use in Daimler's various commercial vehicle and bus divisions, and more sectors will be invested in soon, Weber said.