German car manufacturer Daimler has pledged to build a carbon neutral passenger car fleet by 2039, making the firm - which owns Mercedes - the first automaker in the world to commit to such an ambitious a carbon neutral production target.

The carmaker said its emission free ‘Ambition2039’ strategy would also see have plug-in hybrids or all-electric vehicles account for more than 50 per cent of all car sales by 2030.

Board member Ola Källenius said the explicit commitment to green vehicle technology, as a result of concerns over climate change and environmental impact, would amount to a “fundamental transformation of our company within less than three product cycles”.

He explained this time frame was “not much time when you consider that fossil fuels have dominated our business since the invention of the car by Carl Benz and Gottlieb Daimler some 130 years ago”.

Källenius set out further plans to electrify Daimler’s fleets of vans, trucks and buses, as well as research and development into power source technology including battery-electric mobility and other solutions, including fuel cell or eFuels.

The move comes after rival Volkswagen - which owns Audi, Bentley and Porsche - said it would launch 70 electric models in a decade and be completely carbon neutral by 2050, with a target of electric vehicles accounting for at least 40 per cent of total sales by 2040.

Referring to clean modes of transport of the past, Källenius said: “So, we prefer doing what our founders have done: they became system architects of a new mobility without horses. Today, our task is individual mobility without emissions.”

Responding to the news, Helen Clarkson, chief executive of The Climate Group, the international non-profit with a mission of accelerating climate action, said: “Businesses are the auto industry’s biggest customers, and many are already switching their fleets to electric and installing charging points through our EV100 initiative on clean transport.

“They are sending an undeniable signal that the future of transport is electric - and it’s time vehicle supply started to match their demand. We now need more company fleets and car manufacturers to keep following the signs and go all in on electric mobility.”

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