Mercedes-Benz Agrees to Pay $149.6 Million to Settle Multistate Emissions Allegations
Mercedes-Benz USA and its parent company, Daimler AG, have agreed to pay a substantial sum of $149.6 million to settle allegations of emissions cheating. This settlement comes after a coalition of attorneys general from various states accused the German automaker of secretly installing devices in hundreds of thousands of vehicles to pass emission tests, despite reducing emission controls during regular operation.
Between 2008 and 2016, the company equipped over 211,000 diesel passenger cars and vans with software that optimized emission controls during tests but reduced them during everyday use. This allowed the vehicles to exceed legal limits for nitrogen oxides, a harmful pollutant linked to respiratory issues and smog.
The states claimed that Mercedes installed these devices due to challenges in meeting design and performance goals, such as fuel efficiency, while adhering to emissions standards. The company allegedly concealed this from regulators and the public, marketing the vehicles as environmentally friendly and compliant with regulations.
While the agreement is subject to court approval, it follows a previous settlement in 2020, where Mercedes-Benz and Daimler AG agreed to pay $1.5 billion to the U.S. government and California state regulators to resolve similar emissions cheating allegations. Mercedes-Benz's latest statement confirms that the Monday deal will settle all remaining legal proceedings related to diesel emissions in the United States, despite the company's stance that the accusations are unfounded and denies any liability.
The settlement involves a coalition of 50 attorneys general, including those from the District of Columbia and Puerto Rico, excluding California. It mandates a $120 million payment to the attorneys general, with an additional $29 million suspended, potentially waived upon the completion of a consumer relief program.
This program will benefit approximately 40,000 vehicles equipped with the devices that haven't been repaired or removed by August 1, 2023. Owners of these vehicles will receive $2,000 per vehicle if they install approved emissions modification software and an extended warranty.
Furthermore, the settlement requires Mercedes to comply with reporting obligations and refrain from any deceptive marketing or sales practices related to diesel vehicles in the future.
It's worth noting that Volkswagen also faced a criminal case, paying $2.8 billion to settle emissions cheating allegations.
