Mercedes-Benz Group AG will pay up to $150 million in a settlement reached with nearly all American states over its use of “defeat devices” designed to cheat emissions tests in its diesel vehicles.
The announcement was the latest chapter in the sprawling “dieselgate” scandal, which has roiled the automotive industry for the past decade and has resulted in criminal investigations, lawsuits and regulatory crackdowns around the world. Automakers including Volkswagen and Mercedes were accused of using software that made their cars appear to be less polluting during emissions testing.
“This was not a technical error or a paperwork mistake. It was a lie,” Kathy Jennings, attorney general of Delaware, said. “It was a deliberate effort to gain an unearned competitive advantage while leaving the public to foot the bill for the health and environmental impacts of their pollution.”
The company confirmed the settlement but denied wrongdoing in a statement on Monday.
Mercedes-Benz was accused of violating state environmental laws and statutes against unfair or deceptive trade practices. Every state attorney general in the country took part in the settlement except for those of Arizona and California, which had previously reached their own settlements with the company.
William Tong, attorney general of Connecticut, said officials found “a heavy dose of industrywide collusion” and “antitrust overtones” in their yearslong investigation.
At issue was software that was used in various brands. The states alleged that Mercedes sold more than 211,000 vehicles nationwide from 2008 to 2016 that were equipped with software that made the engines run more cleanly during emissions tests, but then reduced the emissions restrictions when the vehicles were out on the road in day-to-day driving. Engines running with less stringent pollution controls can be more powerful and responsive.
The software enabled the vehicles to exceed the legal limits for nitrogen oxide emissions, which raise the risk of respiratory illness in people and contribute to smog. At the same time, the company marketed the vehicles as more efficient and environmentally friendly than gas-fueled cars, officials said.
The company said the settlement related to the emission control systems of 2009 to 2016 BlueTEC II diesel passenger cars and vans sold in the United States. “Mercedes-Benz is taking another important step toward resolution of various diesel proceedings,” it said in a statement. “The company is thus resolving all material remaining legal proceedings related to diesel emissions in the U.S.”
In 2020, Daimler AG, now known as Mercedes-Benz Group AG, settled claims over diesel emissions with the federal government and California for $2.2 billion.
Regarding the new deal, it said it had cooperated with the investigations, but “continues to regard the accusations made as unfounded.” Under the agreement, the company will make an initial payment of $120 million to the states and provide $2,000 in incentives for drivers to update the software on their vehicles.
The fallout from the wider diesel scandal was bruising. Volkswagen pleaded guilty to U.S. criminal charges in 2017 and paid $20 billion to resolve claims against it, including consumer lawsuits. Fiat Chrysler agreed to an $800 million settlement with the Justice Department and California in 2019.
Karen Zraick covers legal affairs for the Climate desk and the courtroom clashes playing out over climate and environmental policy.
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