The parent company of Mercedes Benz has been fined $1.5 billion for cheating emission laws in the U.S. with vehicles fitted with ‘defeat devices’ that fooled regulators.
The fine was handed down by the U.S. Environmental Protection Agency, as well as the California Attorney General’s Office who alleged that Mercedes Benz was violating environmental laws with the “defeat device software”, which would alter a vehicle’s emissions when put into a test simulation to make it appear more economical than reality.
It comes just days after agreeing on a separate settlement valued at $700 million.
Mercedes Benz’ parent company Daimler has agreed to settle the case with the EPA and Federal government for $1.5 billion, which remains subject to approval from the court in Washington. The state of California will also receive $17.5 million to help it enforce future environmental regulations in the automotive sector.
In a separate class-action lawsuit, Daimler agreed to settle a case for $700 million, which amounts to a grand total of $2.2 billion for alleged violations of environmental protection regulations.
Part of the settlement stipulates that Daimler agrees to fix vehicles that it has sold fitted with the emissions cheating devices and software. Officials from the Department of Justice have said that this agreement means that Daimler will fix passenger vehicles within the space of 24 months, and vans fitted with defeat devices in the space of 36-months.
Terms of the settlement also say that Daimler must offer drivers of impacted vehicles extended warranties for certain parts and vehicles, and agree to test each impacted car for emissions figures each year for five-years consecutively.
It’s understood that more than a quarter of a million vehicles fitted with defeat devices were sold between 2009 and 2016.
Deputy Attorney General Jeffrey Rosen has issued a statement saying that “by requiring Daimler to pay a steep penalty, fix its vehicles free of charge, and offset the pollution they caused, today’s settlement again demonstrates our commitment to enforcing our nation’s environmental laws and protecting Americans from air pollution.”
Rosen added that “when something ends up costing a manufacturer $1.5 billion, we would anticipate that has deterrent effects on other automakers as well.”
Daimler has said that the settlement of the case in no way indicates liability for the defeat devices, adding that the company will not introduce a buy-back scheme, similar to that of Volkswagen who was found to have installed the same emissions-fooling device on a number of their diesel vehicles.
Volkswagen settled a criminal case in the United States for $2.8 billion, with another manufacturer, Fiat Chrysler being investigated for the same emissions-related offences.
California Attorney General Xavier Becerra has released a statement saying that “installing defeat device software on your vehicles to deceive emissions regulators doesn’t qualify as doing more… it just means you’ll pay more in penalties once we catch you. And we will, because cheaters really aren’t as smart as they think.”
Daimler is also being investigated in its home country of Germany, with a civil lawsuit claiming that some of its vehicles release more pollutants and emissions than advertised by the automanufacuter.
The California Air Resources Board (CARB) has said that Daimler vehicles powered by diesel powertrains were significantly over the state limit for emissions. Chair of the California Air Resources Board, Mary Nichols has said that “Californians live with some of the worst air in the country, air that adversely impacts public health, causing or contributing to asthma, respiratory disease and premature death.”
“Automakers must learn that in this state, CARB will continue to use the very latest and most sophisticated science and technology to catch cheating and violations that impact our air and health.”
A statement from Daimler reads that “with the settlements, we take another important step toward resolution of various diesel proceedings,” while adding that the company wants to avoid “lengthy court actions with respective legal and financial risks.”
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