Daimler AG and Mercedes-Benz USA have agreed to pay a $1.5 billion settlement over allegations the automaker cheated on diesel engine emissions tests in the U.S. The settlement will be payable to the U.S. and California governments.
The U.S. Department of Justice, Environmental Protection Agency and California attorney generals office say Daimler utilized software within its diesel engines that allowed the company to cheat on diesel emissions tests. The suit claims Daimler sold 250,000 vehicles in the U.S. that circumvented emissions testing, meaning they were out of compliance with federal emissions standards.
As part of the settlement, which includes civil penalties, Daimler will be required to fix the impacted vehicles in the U.S.
Today’s announcement comes after Daimler had stated back in August the company had reached a deal with U.S. regulars surrounding the alleged emissions issue. Despite the settlement, Daimler denies it cheated on U.S. emissions tests and points out the today’s settlement does not definitively confirm the company cheated on testing.
Daimler also points out that they did not receive a formal notice of violating the Clean Air Act from the EPA or California, something that would be typical if defeat devices were detected during emissions testing. Volkswagen did receive such notice with regards to their own diesel emissions cheating scandal.
Speaking of Volkswagen, Daimler is not required to buy back any vehicles like Volkswagen was in its settlement.
Daimler states it will see a one-time charge of $875 million for the civil penalties portion of the settlement and a few hundred million euro for the remaining requirements of the settlement. The EPA first approached Daimler back in 2016 regarding this matter.