Post by : Badri Ariffin

Mercedes-Benz has reached an agreement to pay $149.6 million to settle ongoing allegations from U.S. states regarding the use of illegal software to alter diesel emissions tests. This marks the conclusion of its last diesel-related legal challenges in the United States.

The announcement was made by Letitia James, stating that this settlement resolves claims from 48 states, Puerto Rico, and the District of Columbia. Investigators claimed that Mercedes incorporated undisclosed software in certain diesel models to lower emissions during lab tests while permitting significantly higher pollution outputs in real-world conditions.

Regulators noted that the vehicles in question were engineered to comply with emissions standards only during controlled testing. Under typical driving scenarios, some versions reportedly emitted pollutants at levels reaching 30 to 40 times above allowable limits, breaching state environmental and consumer protection laws.

As part of the agreement, Mercedes-Benz will directly compensate the participating states and reimburse eligible consumers. Owners and lessees of vehicles that underwent sanctioned emissions updates will receive a payment of $2,000 per vehicle. The automaker will also bear the costs for emissions software upgrades, provide extended warranties, and implement additional compliance measures to avert future infractions.

The settlement impacts approximately 39,565 diesel vehicles in the U.S. that remained unrepaired or not permanently taken off the road as of August 2023.

Mercedes must make an immediate payment of $120 million to the involved states. Additionally, $29.6 million is contingent and may decrease depending on the company’s efforts to repair, remove, or repurchase vehicles.

The automaker confirmed that this agreement effectively concludes all outstanding diesel-related legal proceedings in the United States. A spokesperson for the company noted that the settlement would not affect financial results, as adequate provisions have already been allocated to cover these costs.

This state-level settlement comes after a $2.2 billion deal reached in 2020 with U.S. federal authorities, which resolved criminal and civil investigations and provided compensation for around 250,000 vehicle owners.

Mercedes’ investigation began following the 2015 Volkswagen diesel emissions scandal, which resulted in over $20 billion in losses for Volkswagen globally. While this U.S. settlement brings closure domestically for Mercedes, diesel-related lawsuits persist in other regions, including significant litigation in the United Kingdom.

#Global News