MADISON, Wis. (AP) — Mercedes-Benz USA and parent Daimler AG have agreed to pay $149.6 million to resolve allegations that the automaker secretly installed equipment on hundreds of thousands of vehicles to pass emissions tests, a coalition of attorneys general announced Monday.
The German automaker equipped more than 211,000 diesel buses and vans between 2008 and 2016 with software devices that optimized emissions controls during testing but reduced controls during normal operation, according to the alliance. The devices cause vehicles to emit far more than legal limits of nitrogen oxides, a pollutant that can cause respiratory illness and contribute to smog.
The states allege that Mercedes installed the devices because it could not meet design and performance goals such as fuel efficiency while complying with emissions standards. The automaker allegedly concealed the devices from state and federal regulators and the public while promoting the vehicles as “environmentally friendly” and compliant with emissions standards.
The agreement remains subject to court approval.
Daimler AG and Mercedes-Benz USA have agreed to pay $1.5 billion to the U.S. government and California regulators in 2020 to resolve emissions cheating allegations.
Mercedes-Benz said in a statement that the deal announced on Monday would resolve all remaining legal actions in the United States related to diesel emissions, but the company continued to view the accusations as baseless and denied any responsibility. The automaker has provided “adequate reserves” for settlement costs, the statement said.
The coalition announced Monday is made up of fifty attorneys general, including those of the District of Columbia and Puerto Rico. California is not part of the organization.
The settlement requires the automaker to pay $120 million to the attorney general and another $29 million will be suspended and potentially forgiven until the consumer relief program is completed.
The work will be extended to approximately 40,000 vehicles that have not had equipment repaired or permanently removed from the road by August 1, 2023. Owners of these vehicles will receive $2,000 per vehicle for installing approved emissions modification software and extended warranties.
The settlement also requires Mercedes to comply with reporting requirements and refrain from any further unfair or deceptive marketing or sales of diesel vehicles.
Volkswagen also ultimately paid $2.8 billion to settle criminal cases stemming from emissions cheating.
