New York(CNN Business) Mercedes-Benz pledged on Monday to make its new passenger car fleet carbon-neutral within two decades, an ambitious goal built on electric vehicles and renewable energy.
The target, described as a "fundamental transformation of our company," appears to be more aggressive than similar carbon-neutral targets announced by Volkswagen ( and other major auto makers. )
Mercedes, owned by Daimler (, will slash its carbon footprint by building far fewer combustion engines. By 2030, the German manufacturer aims to have all-electric models and hybrids make up more than half of its total car sales. )
And Mercedes plans to lean on wind power and other forms of clean energy to make its vast manufacturing operations cleaner. The auto maker set a goal of carbon-neutral European plants by 2022.
Mercedes explicitly cited environmental worries as the reason behind the overhaul.
"We have set a clear course to help prevent further acceleration of climate change," the auto maker said in a statement, adding that the Paris climate accord is "more than an obligation -- it's our conviction."
Mercedes on Monday introduced the first of its Mercedes-Benz EQC generation of electric models.
Rival VW announced a bold move of its own in March. The company, which also owns the Audi, Bentley and Porsche brands, said it will launch 70 electric models in a decade and be completely carbon neutral by 2050. Volkswagen aims to make electric vehicles at least 40% of its total sales by 2040.
Daimler's carbon-neutral announcement does not include its vast commercial vehicle fleet, which includes Freightliner trucks and Thomas Built Buses.
Still, the Mercedes pledge is the latest shift away by auto makers away from traditional engines.
"If we're going to meet our climate goals, the internal combustion engine has to go away," said Carol Lee Rawn, senior director of transportation at Ceres, a nonprofit sustainability group.
None of this will be easy.
Mercedes acknowledged that its makeover is a "huge challenge" -- both technologically and financially. It will require enormous amounts of investment to renovate factories, supply chains and develop new models. And Mercedes vowed to continue to offer performance and luxury -- without creating sticker shock.
"We want to make sustainable mobility even more exciting, not more expensive," Mercedes said.