Mercedes-Benz Settles US Diesel Emissions Controversy for $149.6 Million

Post by : Bianca Suleiman

Mercedes-Benz has committed to a $149.6 million settlement regarding ongoing claims by US states alleging the use of illegal software in diesel vehicles, thus resolving its last legal issues related to diesel emissions in the United States.

The resolution was made public on Monday by Letitia James, outlining how the agreement addresses claims from 48 states, Puerto Rico, and the District of Columbia. Authorities accused Mercedes of employing undisclosed software in certain diesel models that manipulated emissions tests, allowing for substantially increased pollution during on-road use.

As per regulators, these vehicles were engineered to pass emissions standards solely under controlled testing, yet some models purportedly emitted pollutants at levels 30 to 40 times above permissible limits during regular driving, breaching state consumer protection and environmental statutes.

In accordance with the settlement, Mercedes-Benz will distribute direct payments to the involved states and compensate eligible customers. Owners or lessees of vehicles that underwent approved emissions modifications will receive $2,000 per car. The automaker will also bear the total expense of emissions update software installation, extend warranties, and enact extra compliance measures to avert future infractions.

The agreement encompasses approximately 39,565 diesel vehicles in the US yet to be repaired or permanently withdrawn from service as of August 2023.

Per the terms of the settlement, Mercedes must promptly remit $120 million to the participating states. An additional $29.6 million is on hold and may be adjusted based on the number of vehicles repaired, removed, or repurchased by the company.

Mercedes-Benz stated that this settlement effectively concludes all outstanding diesel-associated legal issues within the United States. A company representative remarked that the settlement will not alter financial results due to previously established provisions to cover potential costs.

This state-level settlement follows a distinct $2.2 billion agreement from 2020 between Mercedes-Benz and US federal authorities, which resolved various investigations and compensated around 250,000 vehicle owners.

The inquiry into Mercedes was spurred by the Volkswagen diesel emissions scandal that surfaced in 2015, which ultimately cost Volkswagen over $20 billion internationally. While this settlement marks a conclusion for Mercedes in the US, the company is still tackling diesel-related legal challenges in other jurisdictions, including a significant lawsuit in the UK.