Mercedes-Benz USA, along with its parent company Daimler AG, has reached a settlement agreement to pay $149.6 million in response to allegations concerning emissions cheating. This decision follows a coalition of attorneys general who unveiled the claims on Monday, December 23.
The allegations assert that between 2008 and 2016, the automaker installed software devices in over 211,000 diesel passenger cars and vans. These devices were designed to optimize emissions controls during testing conditions but permitted higher emissions levels during regular vehicle operation. This manipulation enabled the vehicles to significantly surpass the legal limits for nitrogen oxides, a harmful pollutant linked to respiratory issues and smog formation.
The coalition contends that Mercedes-Benz resorted to these deceptive practices because it was unable to meet design and performance benchmarks, including fuel efficiency, while adhering to emissions regulations. Furthermore, the company allegedly concealed these devices from both state and federal regulators, while simultaneously marketing the affected vehicles as “environmentally friendly” and compliant with the applicable emissions standards.
A spokesperson for Mercedes-Benz has yet to provide any immediate comments regarding the settlement. It is noteworthy that this is not the first time the company has faced consequences for such actions. In 2020, Daimler AG and Mercedes-Benz USA agreed to pay $1.5 billion to resolve earlier emissions cheating allegations involving the U.S. government and California state regulators.
The coalition that announced the recent settlement is composed of fifty attorneys general, including those from the District of Columbia and Puerto Rico, though California is not part of this group. The settlement stipulates that $120 million will be paid to the attorneys general, while an additional $29 million will be suspended and potentially waived, contingent upon the completion of a consumer relief program.
This consumer relief initiative is aimed at approximately 40,000 vehicles equipped with the contentious software that had not been repaired or permanently removed from circulation by August 1, 2023. Vehicle owners will be eligible to receive $2,000 per vehicle if they opt to install approved emissions modification software along with an extended warranty.
Additionally, the settlement requires Mercedes-Benz to adhere to more stringent reporting requirements and prohibits the company from engaging in any further unfair or misleading marketing related to the sale of diesel vehicles. This incident follows a similar situation with Volkswagen, which faced significant penalties, including $2.8 billion in a criminal case related to emissions cheating.
