Mercedes-Benz agrees to $149.6 million settlement with U.S. states over excess diesel emissions

Mercedes-Benz has reached a $149.6 million settlement with U.S. states to resolve a long-running investigation into allegations of diesel emissions cheating by the German automaker, New York Attorney General Letitia James said Monday.

Under the settlement with 48 U.S. states, Puerto Rico and the District of Columbia, Mercedes will pay $149.6 million and provide $2,000 payments to eligible owners and lessees whose vehicles receive required emissions repairs. Mercedes also agreed to adopt a series of actions to prevent future misconduct and comply with oversight requirements, the states said.

The states said Mercedes installed undisclosed, unlawful software in diesel vehicles that hid the true levels of pollution and improperly lowered emissions during government testing, but in normal driving conditions, the vehicles emitted up to 30 or 40 times the legal limit.

In 2020, Mercedes-Benz agreed to pay $2.2 billion to resolve a U.S. government diesel emissions cheating investigation and claims from 250,000 U.S. vehicle owners.

As part of the new settlement with the states, the automaker must immediately pay $120 million to the states and $29.6 million is suspended and will be reduced by $750 for each affected vehicle Mercedes repairs, takes off the market, or buys back.

The states launched an investigation into Mercedes-Benz in 2020, following Volkswagen’s massive diesel emissions scandal, which cost VW more than $20 billion in fines, penalties, and settlements after it admitted in 2015 that it had cheated emissions tests by installing “defeat devices” and sophisticated software in nearly 11 million vehicles worldwide.