The dual-mode hybrid concept, as described in 1994, was developed to optimize vehicle efficiency by switching between
parallel and
series hybrid operation, taking advantage of series operation in stop-and-go traffic to minimize engine speed variance, and parallel operation at highway speeds to use efficient mechanical transmission. On September 30, 1993, the
United States Department of Energy signed a contract with General Motors to develop and demonstrate hybrid electric powertrains for light duty vehicles. AHS-2 was derived from a dual-mode hybrid system developed earlier by
Allison Transmission, then a division of GM, for
transit buses. The Allison system first had been announced for buses in 2003.
Partnership formed The GM/DaimlerChrysler partnership was announced on December 13, 2004, with
Dieter Zetsche of DaimlerChrysler joining
Rick Wagoner of GM on stage with a prototype. Negotiations had begun earlier in October, after engineering managers at both companies discovered they were independently working on similar dual-mode hybrid concepts while participating on the same conference panel. The agreement was not signed until the following August, however. The three companies formed an organization called Global Hybrid Cooperation with engineering and management centered at the
GM, DaimlerChrysler and BMW Hybrid Development Center in
Troy, Michigan.
Vehicles introduced The two-mode hybrid system was introduced to the light-duty vehicle market as a drivetrain option for the 2008 model year
Chevrolet Tahoe and
GMC Yukon, with an observed improvement in fuel economy of 27–58% compared to a conventionally-powered equivalent.
GMC Sierra, and
Cadillac Escalade. The largest improvement was in the EPA city rating. The dual-mode hybrid equipment added approximately , but this increase was offset completely by lighter seats, wheels, and 12-volt battery; aluminum engine and body components; and eliminating the
starter motor. It was equipped with a
6.0L LFA and LZ1 V-8 engines featuring
Active Fuel Management, which was larger than the standard
5.3L LY5 base engine. BMW and Mercedes introduced the
X6 ActiveHybrid and
ML450 Hybrid, respectively, in 2009, but these were discontinued in 2011.
Dissolution Earlier, on March 1, 2007, BMW and DaimlerChrysler announced that they were entering a separate partnership to develop a
mild hybrid module for rear wheel drive premium cars. They planned to roll out the new system within the next three years on BMW and Mercedes-Benz vehicles. GM did not participate in the new partnership, and did not announce plans to develop a similar hybrid RWD system for cars. In 2009 Mercedes released the S400 mild hybrid, using a
lithium ion battery. It was reported in July 2009 that after the upcoming introductions of two-mode hybrid models of the
BMW X6 (marketed globally) and the
Mercedes-Benz M class (only in the United States), the two-mode hybrid joint venture would be dissolved. Daimler indicated that it wants to avoid investing in aftersales and service for a vehicle which will only be produced in small quantities, and will instead concentrate on modular hybrid building blocks with scalable
lithium-ion batteries, based on the hybrid drive developed for the
S-class and
7 Series sedans by the joint venture with BMW and auto supplier
Continental AG. By 2014, the two-mode hybrid drivetrain was no longer offered on any light-duty vehicles. ==Technology==