As European buyers turn away from fuel-efficient diesel cars, and in a race to meet tighter emissions rules, Mercedes-Benz is accelerating its rollout of battery-powered autos.

Three years earlier than a target announced at the Paris auto show in September, the world’s largest luxury-car maker intends to release 10 new electric vehicles by 2022 in a 10 billion-euro ($10.8 billion) project. As they brace for a shift away from traditional automotive technologies, the expedited time frame reflects the urgency facing manufacturers. Mercedes parent Daimler AG said on Wednesday that combustion engines would continue to be refined for a “transitional period”.

“We want to shape the profound transformation of the automotive industry from the forefront,” Daimler Chairman Manfred Bischoff said in a statement at the company’s annual shareholder meeting in Berlin. “Further fundamental changes will be required for Daimler to remain successful,” as the industry adjusts to cars running on electric motors and capable of driving themselves.

There has been a backlash against diesel cars stemming from Volkswagen AG’s cheating scandal and the industry faces it while it embarks on the faster pace. And as German prosecutors investigating the Stuttgart-based automaker’s employees over diesel-manipulation allegations, Daimler has also been embroiled. For meeting increasingly stringent rules for lower carbon-dioxide emissions, the technology is key.

In his first public comments on the matter since the investigation became public on March 22, Chief Executive Officer Dieter Zetsche said on Wednesday that Daimler is “naturally” cooperating with authorities on the diesel probe. No violations in their tests of Daimler vehicles were found by Germany’s motor authority and transport ministry, he repeated.

With levels in Europe steady at 123 grams per kilometer as buyers favored larger vehicles, Daimler struggled in 2016 after achieving steady reductions in CO2 emissions in previous years. Daimler needs to reach 100 grams per kilometer by 2021 or face fines in its home region.

According to the Center for Automotive Research at the University of Duisburg-Essen, accounting for 43 percent of total sales, Bottom of Form

German diesel demand in December fell to the lowest level since September 2010. After conducting a survey of manufacturers and suppliers in Daimler’s home state of Baden-Wuerttemberg, Germany’s IG Metall union said that early signs of carmakers shifting focus from combustion engines are showing.

“Among development teams, especially in diesel, there are signs there’s less to do as electrification is starting to have an impact,” Roman Zitzelsberger, a union representative on Daimler’s supervisory board, told reporters in Berlin Tuesday. “We found there are fewer follow-up requests and general degree of activity.”

Daimler’s been focusing its investment on future technologies at the expense of short-term profits like other automakers trying to prepare for a future of electric self-driving cars. With about half to go to a subsidiary in Kamenz, Germany, the company plans to spend more than 1 billion euros on its global battery production facilities.

Daimler is also continuing to develop plug-in hybrids to bridge the gap toward an era of fully electric vehicles. With upcoming versions set to include a new hybrid S-Class sedan with an extended battery range of as much as 50 kilometers (31 miles), Mercedes already has eight such models for sale.

“It is necessary to do one thing without stopping with the other,” said Zetsche. “That’s why we are strengthening both: the new and the old.”

(Adapted from Bloomberg)

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