The luxury labels have well and truly caught the hybrid bug, with Mercedes-Benz announcing this week its second eco-friendlier vehicle, the all-new ML450 Hybrid. First seen at the New York Auto Show back in April, the 2010 Mercedes-Benz ML450 Hybrid officially goes on sale on November 16.

Featuring V8-like power with four-cylinder fuel economy, the ML450 Hybrid packs two electric motors and a 3.5-liter V-6 gasoline engine that work together to provide impressive performance and fuel economy.

According to Mercedes-Benz, the big SUV returns a fuel economy of 21 mpg around town and 24 mpg on the highway. For comparison, the similarly sized but V-8 powered 2010 BMW X6 ActiveHybrid returns an EPA-rated 17 mpg in the city and 19 mpg on the highway.

The combined peak output of its two electric motors and V-6 engine stands at 340 horsepower and 381 pound-feet of torque. Fuel efficiency gains are made through a combination of technologies, including stop-start functionality, which helps to cut fuel use while standing still at traffic lights or jams.

Similar to GM’s Two-Mode hybrid system, the two electric motors in the ML450 Hybrid are integrated within a modified automatic transmission. One motor is dedicated to pulling away under electric power and the second is set up specifically for boosting acceleration.

In this combination, the ML450 Hybrid can drive solely on electric power up to a maximum speed of 34 mph. On hard acceleration, the gasoline engine is started automatically.

During braking and coasting, the electric motors act as generators, slowing the SUV and recovering kinetic energy. Under heavy braking, the vehicle's conventional brakes also come into play. Recovered energy is stored in a liquid-cooled, 288-volt nickel-metal-hydride battery that's enclosed under the rear cargo floor so as to not intrude into the storage area.

Joining the S400 Hybrid and BlueTEC diesel models in the Mercedes-Benz lineup, the ML450 Hybrid is being offered as part of a special lease only option (no purchase) for a monthly lease price of $659 per month for 36 months and $549 per month for 60 months.