On the Dash:
- Mercedes-Benz agreed to a $149.6 million multistate settlement over diesel emissions cheating, effectively closing its remaining U.S. dieselgate legal exposure.
- The deal covers nearly 39,565 unrepaired vehicles and includes $2,000 payments, software fixes, and extended warranties for affected owners.
- Mercedes said the settlement will not impact earnings and agreed to new compliance and oversight measures to prevent future violations.
Mercedes-Benz has agreed to pay $149.6 million to resolve a multistate investigation into allegations that the automaker used unlawful software to cheat diesel emissions tests, a settlement that state officials say effectively closes the company’s U.S. legal exposure tied to the dieselgate scandal.
New York Attorney General Letitia James announced Monday that the agreement covers 48 U.S. states, Puerto Rico, and the District of Columbia. Mercedes said the settlement ends its long-running diesel emissions disputes in the United States, stemming from an investigation launched after Volkswagen’s 2015 emissions scandal.
Under the settlement, Mercedes will provide $2,000 payments to eligible owners and lessees whose vehicles received required emissions repairs. The agreement applies to an estimated 39,565 vehicles in the U.S. that had not been repaired or permanently removed from the road by August 2023. Mercedes will also pay for the installation of approved emissions-modification software, provide extended warranties to participating consumers, and implement additional compliance and oversight measures to prevent future violations.
The financial terms include an immediate $120 million payment to the states. An additional $29.6 million is suspended and will be reduced by $750 for each affected vehicle Mercedes repairs, removes from service, or buys back. The settlement remains subject to final court approval.
State officials allege that, under real-world driving conditions, affected vehicles emitted up to 30 to 40 times the legal pollution limits. Mercedes said the settlement will not affect its bottom-line earnings, noting that sufficient provisions have already been made to cover the costs.
The agreement builds on earlier enforcement actions. In 2020, Mercedes agreed to pay $2.2 billion to resolve a separate U.S. government investigation and claims from about 250,000 vehicle owners. While the U.S. settlement closes a major chapter, Mercedes continues to face potential legal exposure overseas, including a mass lawsuit in England.
