Daimler to pay a £1.17bn settlement in US to resolve emissions cheating allegations

Time 1 year ago

Daimler and Mercedes-Benz have agreed on a 1.5bn dollars (£1.17bn) settlement with the US government and California state regulators to resolve diesel emissions cheating allegations.

The German giant used defeat device software to get round strict emissions testing and sold around 250,000 cars and vans in the US that broke state and federal laws, said the US Department of Justice, the Environmental Protection Agency (EPA) and the California attorney general’s office.

The settlement, which includes civil penalties, will also require Daimler to fix the vehicles, officials said.


Daimiler said last month it had agreements with the Justice Department, the EPA, Customs and Border Protection, the California Air Resources Board and others over civil and environmental claims involving about 250,000 diesel cars and vans.

EPA administrator Andrew Wheeler said Daimler did not disclose all of its software, which included ‘devices designed to defeat emissions controls’.

In a statement, Daimler said it denied the allegations and refute claims it had cheated emissions laws and did not admit to any liability in the US.

The settlements resolve civil proceedings without any determination that Mercedes and Daimler vehicles used defeat devices, the company said.

Plus, Daimler said it did not receive a notice of violation of the Clean Air Act from the EPA or California regulators, which is common when defeat devices are used.

Daimler said it is not obliged to buy back the vehicles, as Volkswagen was, nor will it have an independent monitor to track its progress on the settlement.

‘By resolving these proceedings, Daimler avoids lengthy court actions with respective legal and financial risks,’ the firm said.

Daimler also said the emissions control system in US vehicles is different to models sold in Europe because of varied regulatory and legal requirements.

Daimler said the settlement would bring costs of about 1.5bn dollars, while the civil settlement will bring a one-off charge of about 700m dollars (£544m).

It estimated that ‘further expenses of a mid three-digit-million’ euros would be required to fulfil conditions of the settlements.

How it would clean up the vehicles was not made clear by Daimler or whether it was accused of any wrongdoing in the US like Volkswagen, which paid 2.8bn dollars to settle a criminal case due to cheating.

Fiat Chrysler Automobiles is also being investigated for allegedly cheating on emissions.

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California attorney general Xavier Becerra said: ‘Long term, cheating isn’t the smartest way to market your product. Daimler is finding that out today. But they’re not the first — nor likely the last — to try.

‘Installing defeat device software on your vehicles to deceive emissions regulators doesn’t qualify as doing more. It just means you’ll pay more in penalties once we catch you. And we will, because cheaters really aren’t as smart as they think.’

Daimler’s pollution practices also are under investigation in Germany, and civil lawsuits claim the vehicles emitted more pollutants than advertised.

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