The latest car to emerge from the German arms race is the Mercedes E550. Part of the revised E-class family that goes on sale this fall and in the U.S. consists of the E350 (same 268-hp engine as last year), the diesel E320 BlueTec, and the E55-replacement 507-hp E63 AMG, the 2007 E550 replaces the E500. So say farewell to the E500’s 302-hp, 5.0-liter 24-valve V-8 and hello to a 5.5-liter version of the engine with new 32-valve heads that bump up output to 382 horses and 391 pound-feet of torque. That’s more power than the first, nonsupercharged 349-hp E55 AMG could muster. More important perhaps, at least to Mercedes-Benz, is that the E550 makes 22 more horsepower than its BMW challenger, the juggernaut 550i. Coupled to Mercedes’ seven-speed automatic, the E550 hurtles forward rapidly and gracefully. Upshifts, even at full throttle, are fast and smooth and barely drop engine revs. With 391 pound-feet of torque available from 2800 to 4800 rpm, seven speeds seem like wretched excess, but then again, the opposition’s gearbox had six, so, clearly, it had to be done. At slower speeds the E550 feels much like the E500. It’s only when triple-digit speeds are reached that the extra punch can really be felt. Mercedes’ Airmatic DC adjustable suspension is standard and does an admirable job of absorbing impacts, although we did notice more squat under acceleration than we remember in the E500. The optional Sport package with 18-inch wheels did little to dissuade the E550’s nose from jerking upward under hard acceleration.