True, but the effect is the same. Mercedes got rich by totally ignoring this piece of crap legislation and rolling the charge of the tax into the price of the car
However, if you start charging excise taxes on a car based on vehicle size and engine size, a Mercedes-Benz could see its price zoom up 40-50% just to cover the excise tax charges. That's the reason why in Europe many cars are usually limited to a certain length, width and engine displacement to keep the customer from being hit with increasingly high excise taxes. I mean consider the current generation of the Honda Civic sedan. The reason why the car has this specific shape and engine displacement is the fact that they also sell this model in Japan, where exceeding certain external dimensions and engine displacement results in a steep rise in the excise tax imposed on the car.
Anyway, improvements in drivetrain technology will improve fuel efficiency fairly steeply very soon. The wide availability of low-sulfur gasoline will mean engines can switch to direct-injection fuel delivery (e.g., directly injectin the fuel into the combustion chamber), which means we can increase the fuel efficiency of a car as much as 20%! Combine this with increased use of hybrid drivetrains and a Toyota Prius could break the 70 mpg barrier pretty easily.