Judge Approves Daimler AG's $1.5 Billion Diesel Emissions Settlement

Matt Posky
by Matt Posky

On Tuesday, a federal judge approved a $1.5 billion settlement to pump the brakes on an investigation conducted by the U.S. government pursuing claims that Daimler used illicit software that allowed excess diesel emissions on 250,000 units. This runs in tandem with another $700 million settlement the automaker is making with vehicle owners, which is likely to see final approval in a few months, and an extensive recall campaign.

The federal case involves the U.S. Justice Department, the California Air Resources Board, and follows a trend of fines for automakers accused of misleading regulators so that diesel vehicles could continue being sold. This kicked off with Volkswagen’s Dieselgate in 2015, with numerous government probes taking place in Europe and North America over the next five years. Many automakers have since been discouraged from relying on diesel powertrains due to rising regulatory actions. European countries that once championed the fuel as ecologically preferable to gasoline, after the advent of biodiesels, are now obsessed with tamping down NOx emissions and getting more electric vehicles onto the road.

Diesel isn’t just dying, it has become a liability. Some companies have even stopped selling diesel-powered vehicles in places like the U.S., where demand is mostly limited to HD pickups and vehicles used for hauling freight. This includes Volkswagen and Daimler, both of which could have avoided another layer of huge fines had they simply kept diesels out of the country — since nobody seems willing or able to adhere to emission guidelines.

Daimler’s U.S. settlement was announced in September after being under review for years. According to Reuters, court documents stipulate that the automaker is being issued an $875 million civil penalty levied under the Clean Air Act, $70 million in additional penalties, and $546 million to sort out vehicles that didn’t pass emissions or to help “offset” excess emissions.

From Reuters:

U.S. District Judge Emmet G. Sullivan called the California settlement fair, reasonable and in the public interest, and noted settlement talks lasted for more than three years.

As part of the settlement, Daimler will pay California $285.6 million.

The German company has separately agreed to a $700 million settlement with diesel vehicle owners. That settlement has won preliminary approval and is likely to get final approval this summer, said Steve Berman, a lawyer for the owners.

It also had to spend over an additional billion dollars in its home country to appease German regulators in 2019. Meanwhile, the American settlement represents the “second-largest civil penalty in the history of the Clean Air Act” when it was first announced, according to then-EPA head Andrew Wheeler. Volkswagen still remains the largest.

A Daimler spokesperson said that the settlement ruling allows the company to take the necessary steps toward “legal certainty in connection with various diesel proceedings” and issued a reminder that it had cooperated with U.S. regulators. Final approval is expected this summer.

[Image: Franz12/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • ThomasSchiffer ThomasSchiffer on Mar 11, 2021

    I love my Diesel fleet. Take that, eco terrorists.

  • Cimarron typeR Cimarron typeR on Mar 12, 2021

    Considering how hard it is to find a used diesel gle250 or touareg tdi , alot of people do too. I'm not worried about diesels being outlawed where I live . Every other full size truck is a diesel

  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
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