Dieselgate: Mercedes-Benz Reaches US$150 Million Settlement With US Govt

German luxury automaker Mercedes-Benz reached a settlement with the US government recently over its alleged diesel emissions cheating saga - better known as 'Dieselgate'.

Leading German premium automaker Mercedes-Benz has reached a settlement amounting close to US$150 million (approx. RM609 million) with the US government over its alleged diesel emissions cheating scandal – better known as ‘Dieselgate’.

Whilst the 2015 ‘Dieselgate’ saga is largely remembered for how rivals Volkswagen was caught and later punished for cheating diesel vehicle emissions tests, we’ll point out that the same allegations also fell on several other automakers – both European and non-European ones included. Amongst them too was the three-point star marque.

According to a recent report by Reuters, the automaker had reached a US$149.6 million (RM607.82 million) settlement with US states to resolve a long-running investigation – that began in 2020 – Into allegations of diesel emissions cheating. With it, Mercedes-Benz says it effectively ends its legal disputes in the US over said matter. 

Part of the settlement included an agreement for Mercedes-Benz to also provide US$2,000 (RM8,126) payments to eligible owners and lessees with vehicles that received required emissions repairs. The automaker also agreed to adopt a series of actions to prevent future misconduct and comply with oversight requirements.

The US govt reportedly alleged that Mercedes-Benz installed software in its diesel vehicles that hid their true emissions levels by lowering their emissions during government tests.

The three-point star marque had allegedly installed “undisclosed unlawful software in diesel vehicles that hid the true levels of pollution and improperly lowered emissions during government testing,” read the report from Reuters. It adds that under normal driving conditions, said vehicles emitted up to 30 or 40 times the allowed limit.

Additionally, this settlement also extends to roughly 39,565 owners across the US with vehicles that have not been repaired or removed from the roads by Aug 2023. Furthermore, Mercedes-Benz was also ordered to bear the costs of installing approved emissions modification software on each affected vehicle and provide affected consumers with extended warranties too.

Despite the hefty settlement amount, it reportedly won't affect the automaker's bottom-line.

Despite the hefty settlement amount, the same report indicates that this won’t dent the automaker’s bottom-line earnings. An unnamed spokesperson was even cited in saying that “a sufficient provision has been made for the costs of the overall settlement,” which are subject to final court approval.

Prior to this, Mercedes-Benz had agreed to pay US$2.2 billion (RM8.94 billion) to resolve a US government diesel emissions cheating investigation and claims from some 250,000 US vehicle owners.

For the recent settlement, the automaker was also ordered to immediately pay US$120 million (RM487.56 million) to the 48 states that acted against it. A further US$26.9 million (RM109.29 million) ins suspended but will be lowered at a rate of US$750 (RM3,047) for each vehicle it repairs, take off the market, or buys back.