Last year BMW rolled out its C1-E Concept, an all-electric scooter that represented the automaker’s vision of what a safe, environmentally-friendly and highly practical single track vehicle for city traffic could look like.

Now BMW’s closest rival, Mercedes-Benz, through its Smart car division, is retaliating with its own electric scooter concept that will debut at next week’s 2010 Paris Auto Show alongside a similar model from MINI that we saw yesterday. The move is part of a greater plan to diversify Mercedes’ city-car division and hopefully build a presence in what could one day be one of the most hotly contested segments in the world.

The new concept, dubbed the Escooter, features two wheels on a single track and plug-in capability, which means users can simply charge up the scooter in their own homes. It is driven by a disc-shaped wheel hub motor in the rear wheel, which offers a total of 6 horsepower. The brushless direct current hub drive transmits its power directly to the rear wheel and is maintenance free. Top speed is around 30 mph, enough for urban commutes but far short of highway necessities. Total driving range is 62 miles on a single charge of the scooter’s lithium-ion battery.

To brake the Escooter safely, just one touch is enough to slow both the front and rear wheels simultaneously. When the hydraulic disc brake at the front is actuated, an anti-lock braking system kicks in. At the rear the electric motor switches into regenerative mode whenever the brake is applied, slowing the wheel and converting the kinetic energy into electrical energy to top up the battery. Further charge comes from an array of solar cells at the front.

The Smart brand was originally established to tackle the need for improved mobility, especially in congested city environments. However, up to now it has concentrated its efforts on four-wheel solutions. The next stage is to look at how to expand beyond this with other environmentally friendly vehicles, such as the Escooter.

Other models Mercedes-Benz is expected to launch through its Smart car division in coming years includes an all-electric Fortwo, as well as a new rear-wheel drive successor to the original Forfour four-door model.