During a speech in Hannover, Germany, Mr Schrempp (pictured) announced that the Mercedes Citara city bus - the world's first production fuel cell vehicle - is scheduled for delivery in 2002.
Mr Schrempp also announced that in the same year, DaimlerChrysler's plant in Tuscaloosa, Alabama which produces the Mercedes-Benz M Class, will start drawing power from a stationary fuel cell manufactured by the company's subsidiary, MTU.
The fuel cell was the most promising of all alternative drive systems, Mr Schrempp said. Fuel-cell-powered motors "have the potential to become the alternative motor of the future," he said.
"The fuel cell boasts efficiency levels greater than those offered by the combustion engine," he said. "It can be used in both mobile and stationary applications, can run on regenerative fuels and has the potential to become the drive of the future," he said.
DaimlerChrysler would invest around $US1 billion in the development of the technology between now and 2004.
According to the Associated Press news service, Mr Schrempp's announcement prepares DaimlerChrysler for California's zero emissions law, which requires 10 percent of the cars and light trucks sold there use non-polluting models by the year 2003.
While battery-driven cars are one alternative, major manufacturers are scurrying to develop fuel cells because they offer better engine performance, the agency says.
DaimlerChrysler spokeswoman Annette Kliem told Associated Press the company would produce only between 20 and 30 fuel cell buses in the initial batch and would not give figures for additional bus or passenger car production.
According to automotive industry analysts, sales of fuel cell cars are not expected to be competitive against traditional petrol engined vehicles before 2010. The same analysts predict the new technology would cost buyers about 50 percent more than petrol-engined cars.
DaimlerChrysler and Ford, which is also developing fuel cell technology, have said they hope to sell their cars at a 10 percent premium over petrol-engined cars.
Toyota and General Motors are known to be working on a five-year plan to develop cars and trucks using fuel cells and other environmentally friendly fuel systems.
Other US states which have embraced the new Californian 2003 deadline include New York, Massachusetts and Vermont, with Texas expected to be next.