"In 10 years' time, the overall market share of electric cars is likely to be still in the single-digit percentage range," Zetsche said during a Daimler event in Stuttgart, according to a prepared statement.
"In principle it's similar to [US] President Obama -- first, expectations are being raised externally and then people are surprised they don't get fulfilled. From today's perspective it's already clear [that] we won't earn high returns with electric cars in the years to come. And that's the optimistic wording."
Zetsche added, however, that major investments in research and development are needed now to be competitive in 10 years because "in the long run there's no alternative to electric driving."
He said Daimler is "fully on track" to produce its first electric cars from 2012 with annual production volumes in "the five-digit" range. Daimler presented an electric version of its Mercedes-Benz A-Class vehicle at the Paris motor show in October.
Global automakers are investing heavily in electric vehicles to comply with tightening emission regulations globally. But several technical obstacles, mainly relating to the battery, persist and the costs for electric vehicles remain high.