Daimler Agrees to Pay $2.2 Billion Diesel Emissions Settlement
Daimler has officially agreed to pay $2.2 billion as a resolution to the United States’ diesel emissions cheating investigation and over 250,000 claims from Mercedes-Benz customers. The automaker stated that it was likely going to settle in August, estimating a need to set aside roughly $1.5 billion to appease U.S. authorities. Another $700 million was earmarked for civil suits, with the company assuming millions more would be needed to fulfill the requirements of the various settlements.
Court documents shared by Reuters show the company agreeing to pay 250,000 owners up to $3,290 each on vehicles that exceed regulatory emissions standards through the use of emissions cheating software. It also decided against opposing spending $83.4 million in attorney fees and expenses for the owners’ legal representation — something Volkswagen called “unwarranted” in a similarly sized suit where the attorneys were only asking for $59 million. However, VW’s emission woes have remained obnoxiously persistent since 2015 and have cost it well over $40 billion.
By contrast, Daimler is getting off with a slap on the wrist by settling for just a couple billion smackers. Although the likelihood of further criminal action remains relatively high in both the United States and Europe. Keep in mind that it took prosecutors nearly five years just to get this far and governments around the globe are disavowing diesel vehicles as if they appeared in a group photo on Jeffrey Epstein’s private island.
Daimler noted in court papers it denies the allegations “and does not admit any liability.” The settlement does not include an external compliance monitor, it added. The German automaker still faces an ongoing criminal back investigation and could face additional U.S. financial penalties.
The settlements require Daimler to address the vehicles’ excess emissions as part of binding consent decrees. Daimler will issue recalls and extended warranties but is not required to buy back vehicles unless it is unable to offer an emissions fix within a required timetable.
The Justice Department said Daimler failed to disclose at least 16 auxiliary emissions control devices, the government alleged, allowing “vehicles to perform in a variety of consumer-desirable ways, including allowing for fewer (diesel exhaust fluid) tank refills (and) better fuel mileage.”
Breaking the fines down, the settlement includes an $875 million civil penalty over violating the Clean Air Act and an additional $546 million to “repair” polluting vehicles and offset excess emissions. Daimler will also have to pay the State of California $285.6 million and previously agreed to shell out 870 million euros (roughly $1 billion) in Germany over diesels that failed to meet EU regulations.
Deputy Attorney General Jeff Rosen said the American settlements “serve to deter any others who may be tempted to violate our nation’s pollution laws in the future.”
That seems probable but we’re doubtful that it will solve the problem outright. There are several other vehicle manufacturers that are under investigation for similar assumptions of industrial maleficence. Some, like Fiat Chrysler, are also on the hook for using illegal software (defeat devices) designed to falsify testing results used by federal regulators. Considering how difficult it seems to be for automakers to adhere to increasingly rigid emission mandates, we’re dubious that this all ends after a handful of gigantic fines. Though it may become a non-issue for diesel vehicles because the industry seems to be moving away from them as quickly as possible on most automotive applications.
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