FRANKFURT -- Daimler has accelerated development of Mercedes-Benz electric cars, CEO Dieter Zetsche said, adding that he saw the vehicle segment gaining market share.
"We are adjusting our planning in this field," Zetsche told analysts on Thursday during a call on second-quarter results.
His remarks to analysts come as rivals Tesla Motors and Audi prepare their own push to ramp up premium electric cars.
"It is very important to get the right timing," Zetsche said. "As a tendency, and as a trend, we have become more bullish in that regard."
Daimler will reveal more about its plans for electric cars at the Paris auto show in October, he said.
Daimler's Chief Development Officer Thomas Weber said last month that the automaker will display a prototype of an electric-powered Mercedes car with a 500-km (310-mile) range at the Paris show. It will go on sale before 2020, he said.
On Thursday, Daimler reiterated it will increase spending in research and development, which it expects to be "significantly above" last year's 6.6 billion euros, which was already a step up from 5.7 billion invested in 2014.
Daimler will invest in developing new low-emission and fuel-efficient engines, alternative drive systems, autonomous driving technology and a new generation of batteries.
The company said the return on sales at Mercedes-Benz Cars had fallen to 6.4 percent in the second quarter, from 10.5 percent in the year-earlier period. Excluding one-off items like a charge to pay for a recall of vehicles equipped with potentially faulty Takata airbags, the division's return on sales would have been 10 percent, Daimler said.
Investments to roll out new models, such as the latest Mercedes E class, dented the margin. But Zetsche believes an aggressive product push will help Mercedes overtake BMW to become the biggest selling luxury carmaker by sales.
"We believe we can overtake BMW and Audi before 2020," Zetsche told German magazine Wirtschaftswoche.
Last year, BMW retained the title of largest premium automaker posting sales of 1.91 million BMW-branded passenger cars while Mercedes sold 1.87 million cars, compared with a 3.6 percent jump to 1.80 vehicles sold by Audi.
On a group level Daimler's second-quarter earnings before interest and tax (EBIT) fell 12 percent, as a 605 million euros one-off gain from the sale of stakes in Renault and Nissan failed to offset a charge of 400 million euros related to antitrust proceedings, a 244 million euros impairment on shares in BAIC Motor, and 241 million euros in losses from currency transactions.
Nonetheless Daimler said it was sticking to forecasts for slightly higher EBIT in 2016 and significant growth for unit sales.