Speaking after the team announced a multi-year extension to their title sponsorship with Malaysian state-owned oil company Petronas, Zetsche gave his full backing to the sport's technical revolution.
"It's even better that the technological challenge is more identical with the challenge on the business side with the objective to save fuel, to be efficient and very high performance," he told reporters at the Monaco Grand Prix.
"That's exactly what we have to do with our production cars and we use exactly the same technical components...it's making even more sense with the new regulations than it did in the past."
Mercedes, with Lewis Hamilton and Nico Rosberg enjoying a clear performance advantage with the new V6 turbo power unit, have won every race so far this season and also taken every pole position.
Hamilton has won the last four, with Rosberg finishing second, and are so dominant that the title battle between the two team mates is the main talking point ahead of the season's glamour showcase race.
Mercedes motorsport head Toto Wolff said the sport also made sense for Mercedes and Petronas from a rational and financial perspective.
"There is so much negative spin around stories, most recently about the economic state of F1 and whether it makes sense to sponsor or not," he said.
"If you look at the average media value we have generated this season for Petronas and Mercedes, it makes sense from all parameters to invest in Formula One."
Zetsche brushed aside a suggestion that Mercedes's success, after a difficult first three years for the works team following the purchase of Brawn GP at the end of 2009, had made the racing less exciting.
He said it was up to rivals to be more competitive and Mercedes would not make it easy for them.
"We have seen four years in a row with one team winning the championship, now we are talking about five races where one team has won," he said.
"My feeling is that many have expected Mercedes to succeed in this competition. Some were even surprised that it took us so long to become even more competitive. We are there where people expected us before."
(Reporting by Alan Baldwin, editing by Patrick Johnston)
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