Mercedes-Benz Agrees to Pay USD 149.6 Million to Settle Emissions Allegations from Multiple States

Mercedes-Benz USA and Daimler AG have agreed to a USD 149.6 million settlement over allegations of using devices to cheat emissions tests, as announced by a coalition of attorneys general. The automaker allegedly installed these devices in over 211,000 diesel vehicles from 2008 to 2016, allowing them to pass tests but exceed nitrogen oxide limits during regular use.

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The coalition, comprising 50 attorney generals including those from the District of Columbia and Puerto Rico, revealed that Mercedes-Benz used the devices because it couldn't meet design and performance targets while adhering to emissions standards. These devices were hidden from regulators and the public, despite the vehicles being marketed as "environmentally friendly."

Settlement Details and Consumer Relief

The settlement requires Mercedes-Benz to pay USD 120 million to the attorney generals, with an additional USD 29 million potentially waived if a consumer relief program is completed. This program targets around 40,000 vehicles still equipped with the devices as of August 1, 2023. Owners can receive USD 2,000 per vehicle if they install approved emissions software and an extended warranty.

In addition to financial penalties, Mercedes-Benz must adhere to reporting requirements and avoid any deceptive marketing or sales practices related to diesel vehicles. This settlement follows a previous agreement in 2020 where Daimler AG and Mercedes-Benz USA paid USD 1.5 billion to resolve similar allegations with the US government and California regulators.

Comparison with Volkswagen's Case

Volkswagen faced similar scrutiny for emissions cheating and paid USD 2.8 billion to settle a criminal case. The comparison highlights the significant financial repercussions automakers face when involved in emissions scandals.

A spokesperson for Mercedes-Benz did not provide an immediate comment on the settlement announcement. Notably, California was not part of the coalition that reached this agreement with Mercedes-Benz.

The devices in question allowed vehicles to exceed legal nitrogen oxide limits, contributing to smog and respiratory illnesses. These actions were taken as Mercedes-Benz struggled to balance fuel efficiency goals with emissions compliance.

This settlement underscores the ongoing regulatory challenges automakers face in balancing performance goals with environmental standards. It also highlights the importance of transparency in marketing practices related to vehicle emissions.

With inputs from PTI