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Mercedes Takes $3 Billion Hit as Dieselgate Continues

Dieselgate is a term often used in reference to an exhaust emissions cheating scandal. Volkswagen is often the target of the Dieselgate discussion. But, in reality, the uncovering of the cheating scam revealed a bigger problem beyond Volkswagen’s doors. As it turns out, Mercedes became the subject of scrutiny along with other manufacturers such as Fiat Chrysler Automobiles, Nissan, Audi, Renault, and Porsche. Today, Daimler, Mercedes-Benz’s parent company, agreed to pay a fine for its involvement in the United States.

Daimler to pay $3 Billion

Burgundy-red 2010 Mercedes-Benz E-Class sedan driving down a curving road
2010 Mercedes-Benz E-Class sedan | Mercedes-Benz

According to a report from Reuters,

“Daimler said on Thursday it has reached agreements costing nearly $3 billion to settle civil investigations by U.S. regulators and lawsuits from vehicle owners stemming from a long-running probe into software to cheat diesel emissions tests.”

250,000 Mercedes vehicles were involved in the cheat

According to the Verge, several agencies were involved in today’s settlement. They were, “the Environmental Protection Agency, the California Air Resources Board, the Justice Department’s Environment and Natural Resources Division, the California Attorney General’s Office, and the US Customs and Border Protection.” The settlement winds up four years of investigations which were triggered with the uncovering of the Volkswagen emissions cheating scandal. A spokesperson for the California Air Resources Board confirmed to Reuters that there was a settlement, and it will affect 250,000 Mercedes vehicles nationwide.

Mercedes-Benz C-Class Coupe on display at Brussels Expo
A Mercedes-Benz C-Class Coupe | Sjoerd van der Wal/Getty Images

No indication has been given yet what the split is. Will there be a portion of the settlement for a fix to the vehicles that have been polluting excessively; Will there be a buyback like Volkswagen agreed to; Or, will the settlement be just for the penalties? Details have not been disclosed yet.

In addition to a buyback in Volkswagen’s settlement, the automaker also had to pay into accounts set up for infrastructure projects. Just last month, as part of that Volkswagen payout, Florida was able to launch a program to add new charging stations to support the electric car market. Since no details have been provided in the Mercedes case, it remains to be seen if they will be subject to similar action. Details are expected to be disclosed in September.

RELATED: Volkswagen Pays for EV Charging Stations as Recompense for Cheating

Not the first case resolved for Mercedes

The settlement for the case here in the United States follows another one Mercedes had in Germany. In 2019, German regulators found nearly 240,000 Mercedes-Benz vehicles that were violators of clean air ordinances. That figure was spread between the C-Class and E-Class vehicles. They had been equipped with the devices with software that cheated required emissions tests. Under real-world driving conditions, the vehicles’ emissions were higher than the permitted norm and decidedly higher than under emissions testing conditions.

Since Dieselgate began, both Volkswagen and Mercedes have stopped selling diesel vehicles in the United States. The automakers have since increased their efforts toward electrification. Both of them, and other automakers as well, are chasing Tesla, the California automaker of solely all-electric automobiles.

Time to rebuild trust and the Mercedes reputation

The scrutiny from regulators and the public is well deserved. Automakers have taken the consumers’ trust for granted. But, the announcement today of the Daimler settlement means that Mercedes can start to rebuild its reputation. It takes time to gain trust back and to clean off a reputation. Today’s settlement shows that Mercedes is trying to move forward by making things right. That will be a good thing and a first step in rebuilding consumer trust.