Mercedes-Benz is ready to produce 10,000 electric-powered vehicles by the end of 2012.
According to its director for research and development, Thomas Weber, the automaker will push through the plans which would rely on the use of fuel cell stacks.
Lithium ion batteries would be used in the smart range as well as Mercedes-Benz A-Class models.
According to reports from Auto Mobile Magazine, Mr Weber expects the vehicles to be seen during 2009, allowing for a period of extensive testing in real-life environments.
Limited production could then begin by 2010 with full production expected in 2012.
Mercedes-Benz is already pioneering the development of environment friendly cars and it plans to introduce the diesel model of the smart fortwo to British drivers in February.
Consuming only 85.6mpg, the new smart can travel the equivalent distance of Dover to Prague on just a single tank of fuel while releasing only 88g of CO2 per kilometre.