Daijiworld Media Network - Washington
Washington, Dec 23: Luxury automaker Mercedes-Benz USA and its parent company Daimler AG have agreed to pay USD 149.6 million to settle allegations that they installed illegal software devices in hundreds of thousands of diesel vehicles to manipulate emissions tests, a coalition of US attorneys general announced on Monday.
According to the coalition, the German automaker equipped more than 211,000 diesel passenger cars and vans sold between 2008 and 2016 with software that altered emissions controls. The devices allegedly ensured compliance during laboratory testing while reducing emission controls during real-world driving, causing vehicles to emit nitrogen oxides far above legal limits.
Nitrogen oxides are harmful pollutants linked to respiratory illnesses and smog formation.
The states alleged that Mercedes-Benz used the devices because it was unable to meet performance targets such as fuel efficiency while also complying with emissions standards. It was further alleged that the company concealed the software from state and federal regulators and misled consumers by marketing the vehicles as environmentally friendly and emissions-compliant.
The settlement, which is subject to court approval, resolves remaining civil claims by the participating states. In 2020, Daimler AG and Mercedes-Benz USA had already agreed to pay USD 1.5 billion to the US government and California regulators to settle similar emissions-related allegations.
In a statement, Mercedes-Benz said the latest agreement would bring an end to all remaining diesel emissions-related legal proceedings in the United States. However, the company maintained that the allegations are unfounded and denied any liability, adding that it had made sufficient financial provisions to cover the settlement costs.
The coalition comprises attorneys general from 50 jurisdictions, including the District of Columbia and Puerto Rico. California was not part of the settlement group.
Under the agreement, Mercedes-Benz will pay USD 120 million to the states, while an additional USD 29 million payment will be suspended and potentially waived if the company completes a consumer relief programme.
The programme will cover around 40,000 affected vehicles that had not been repaired or permanently removed from the road by August 1, 2023. Owners of these vehicles will be eligible to receive USD 2,000 each upon installing approved emissions modification software along with an extended warranty.
The settlement also requires Mercedes-Benz to meet reporting obligations and refrain from any unfair or deceptive marketing or sale of diesel vehicles in the future.
The case follows similar emissions scandals in the auto industry, including Volkswagen’s diesel cheating case, which resulted in a USD 2.8 billion criminal settlement.