In a significant legal resolution, Mercedes-Benz USA, along with its parent company Daimler AG, has committed to a payment of $149.6 million as part of a settlement related to serious allegations concerning emissions violations. This announcement was made by a coalition of state attorneys general on Monday, highlighting the gravity of the situation.
The allegations date back to a period between 2008 and 2016, during which it is claimed that the prominent German automaker equipped over 211,000 diesel passenger cars and vans with software designed to manipulate emission controls. Specifically, this software optimized the vehicles for emission testing conditions but diminished these controls during everyday driving. As a result, these vehicles emitted nitrogen oxides at levels significantly beyond the legal limits. Such pollutants are known to trigger respiratory problems and worsen smog conditions, raising concerns about public health.
According to the states involved in the case, Mercedes-Benz resorted to installing these deceptive devices because the company was unable to meet both design and performance benchmarks—such as fuel efficiency—while adhering to the existing emissions regulations. Furthermore, the automaker allegedly kept these devices hidden from both regulators and consumers, all while marketing their vehicles as "environmentally friendly" and compliant with emission standards.
It's important to note that this settlement still awaits court approval before it can be finalized.
This is not the first time Daimler AG and Mercedes-Benz USA have faced repercussions for emissions-related issues. In 2020, they had already settled with the U.S. government and California regulators by agreeing to pay a staggering $1.5 billion over similar cheating claims.
Despite agreeing to this new settlement, Mercedes-Benz maintains that the allegations are unfounded and continues to deny any wrongdoing. In their official statement, they indicated that they have made "sufficient provisions" to cover the costs associated with this settlement.
The coalition that announced the recent agreement consists of fifty attorneys general, including representatives from the District of Columbia and Puerto Rico, although notably absent from this group was California.
Under the terms of the settlement, Mercedes-Benz will pay $120 million directly to the attorneys general, with an additional $29 million payment being conditional on the completion of a consumer relief initiative. This program specifically targets approximately 40,000 affected vehicles that had not been repaired or removed from circulation as of August 1, 2023. Owners of these vehicles will receive $2,000 each if they opt to install approved emissions modification software along with an extended warranty.
Moreover, the settlement imposes strict requirements on Mercedes to adhere to new reporting obligations and prohibits any further misleading or deceptive practices regarding the marketing and sale of diesel vehicles.
In a related context, it's worth mentioning that Volkswagen faced a much larger financial consequence, paying $2.8 billion to resolve a criminal case linked to its own emissions cheating scandal.
