MERCEDES-BENZ HIT WITH $150 MILLION PENALTY OVER EMISSIONS CHEATING. (PHOTO).

Mercedes-Benz hit with $150 million penalty over emissions cheating

Mercedes-Benz has agreed to pay a $150 million settlement after being accused of concealing emission-cheating technology in hundreds of thousands of diesel vehicles sold across the United States. As part of the agreement, eligible consumers who owned or leased affected models will receive $2,000 per vehicle. The settlement resolves claims brought by 48 states and two U.S. territories, which alleged the automaker intentionally equipped its diesel cars and vans with software designed to manipulate emissions testing results.

According to the allegations, Mercedes sold more than 211,000 diesel passenger vehicles and vans nationwide that contained so-called “defeat devices.” These software systems were programmed to activate full emissions controls only during laboratory testing conditions, while significantly reducing pollution controls during normal driving. As a result, the vehicles were able to emit nitrogen oxides at levels far exceeding legal limits. Nitrogen oxides are known to contribute to smog formation and are linked to respiratory illnesses and other health problems. Prosecutors said the company pursued this strategy to meet performance goals such as improved fuel efficiency and lower maintenance demands that it could not otherwise achieve while complying with emissions standards.

States further alleged that Mercedes deliberately hid the existence of the defeat devices from regulators and the public while simultaneously marketing the vehicles as environmentally friendly and fully compliant with emissions laws. Advertising materials promoted the diesel models as clean and efficient, even as the software allowed excess pollution during everyday use. Regulators argued that this conduct misled consumers and gave the company an unfair advantage in the marketplace.

Under the terms of the settlement, Mercedes-Benz must pay $120 million to the states once the agreement takes effect. An additional $29.7 million will be suspended and may ultimately be waived if the company successfully completes a comprehensive consumer relief program. That program applies to an estimated 39,565 vehicles that, as of August 2023, had not yet been repaired or permanently taken off U.S. roads.

Mercedes is required to cover the full cost of installing approved emissions modification software on each affected vehicle. In addition, the company must provide owners with an extended warranty related to the emissions repairs and issue $2,000 payments to consumers for each qualifying vehicle. The automaker will also be subject to ongoing reporting requirements and must implement reforms aimed at preventing future violations, including a ban on deceptive marketing practices related to diesel emissions and regulatory compliance.

The settlement places Mercedes-Benz among several major automakers and suppliers that have faced penalties over emissions cheating in recent years. Previous agreements involving similar misconduct resulted in multimillion-dollar payouts by Volkswagen, Fiat Chrysler, and German engineering firm Robert Bosch GmbH, as regulators continue efforts to hold manufacturers accountable for emissions violations and misleading environmental claims.