Daimler Takes a Billion-dollar Hit for Diesel Violations

There’s a whiff of diesel in the air this morning, as all the news out of Europe seems to stem from compression-ignition trickery by German automakers. Hot on the heels of the indictment of Volkswagen boss Herbert Diess and his company’s chairman, Daimler finds itself on the hook for nearly $1 billion in fines in the same country.

The penalty comes by way of Germany prosecutors who claim some 684,000 Mercedes-Benz vehicles came equipped with rigged exhaust gas after-treatment systems.

A two-year probe into Daimler’s diesel engines resulted in a 870 million euro ($960 million) fine for “negligent violation” of clean air standards. The engines found in certain C- and E- Class vehicles apparently emit illegal amounts of nitrogen oxide — the key ingredient in smog.

Last month, Der Spiegel reported that Germany’s transport authority, KBA, ordered Daimler to recall 280,000 vehicles, with the automaker potentially facing fines of 5,000 euros per offending vehicle. Around the same time, strict emissions requirements in Europe forced Daimler to offer existing diesel owners a $3,350 subsidy to cover the cost of upgrading exhaust treatment systems in older models. Without it, many owners would find their personal vehicles banned from certain city centers.

“According to the public prosecutor’s findings, the negligent violation of supervisory duties caused at least in part that certain vehicles of Daimler AG had partly deviated from regulatory requirements since 2008,” Daimler said in a statement.

“After weighing all aspects, Daimler has refrained from taking a legal remedy in the public prosecutor’s administrative offense proceeding. It is in the Company’s best interest to end the administrative offense proceeding in a timely and comprehensive manner and thereby conclude this matter.”

[Image: Murilee Martin/TTAC]