BMW’s new fuel-saving Efficient Dynamics technology is hurting its bottom line but the benefit of keeping the lead on rival Mercedes-Benz in the green stakes is well worth it, say company officials. CFO Stefan Krause revealed the cost of developing the technology blew out in the second quarter, lifting R&D costs to €835 million for the period, which also saw profits drop 4.3%.

However, the early investment will see 40% of BMW’s new-car fleet with CO2 emissions levels of 140g/km or less, putting it in perfect steed against looming emissions targets that will affect all European carmakers. The problem is that most people are not willing to pay a premium for green technologies yet, although they do want the features, an analyst from London’s Bernstein Research told Automotive News.

BMW is willing to pay the price to be the first to the market with the technology but Mercedes-Benz will be attempting to trump BMW’s efforts with its own stop-start technology that will be unveiled at next month’s Frankfurt Show. Mercedes’ head of R&D Thomas Weber boasts that the fuel-saving tech will eventually be available on Mercedes’ entire lineup and that its own research costs have been falling in recent periods.

Both companies have missed the boat on green technology compared to rival Lexus, who has been able to exploit the technologies developed by Toyota and present itself as the eco-friendly premium car manufacturer of choice.