Frankfurt

MERCEDES-BENZ is planning its own distinct line of electric vehicles, challenging BMW and Tesla Motors Inc in a bet that alternative-fuel cars have the potential to become profitable.

Mercedes will add two electric sport utility vehicles (SUVs) and two sedans, according to two people familiar with the plan, who asked not to be named because the details haven't been disclosed. Mercedes will create a new sub-brand for the cars, though a name hasn't been chosen yet, one of the people said. Chief executive officer Dieter Zetsche said in June that the company planned to unveil an electric car at the Paris Motor Show in September.