Daimler's Diesel Emissions Scandal Settlement With the U.S. Will Cost Roughly $3 Billion

Home > News > Content

【Summary】Volkswagen isn’t the only German automaker that’s in hot water over its diesel vehicles that cheated U.S. emissions. Daimler recently reached a settlement with the U.S. government to the tune of roughly $3 billion.

Original Vineeth Joel Patel    Sep 22, 2020 5:30 AM PT
Daimler's Diesel Emissions Scandal Settlement With the U.S. Will Cost Roughly $3 Billion

While Volkswagen's diesel scandal dominated headlines in the United States, Daimler was another major German automaker that had diesels that were found to cheat testing in America. Roughly two years after Daimler's vehicles were caught cheating emissions testing, the automaker has reached a settlement with the U.S. government for roughly $3 billion.

$3 Billion Settlement With The U.S. Government

According to Reuters, Daimler recently announced that it had reached an agreement with the U.S. government. The agreement was made with the California Air Resources Board (CARB), Environmental Protection Agency, California Attorney General's Office, Justice Department's Environment and Natural Resources Division, as well as U.S. Customs and Border protection. 

The settlements, according to the outlet, "address civil and environmental claims" that stem from 250,000 U.S. vehicles that were sold in the U.S.

While the total figure will cost approximately $3 billion, the breakdown isn't as massive. The settlements that involve U.S. authorities will cost somewhere around $1.5 billion. Settling with owners of the emissions-cheating vehicles will cost roughly $700 million, with "further expenses of a mid three-digit-million EUR (euro) amount to fulfill requirements of the settlements."

A CARB spokesman confirmed the settlement with Reuters and a few details of the settlement. More information on the settlement will be announced at a later date with a current anticipated ate of mid-September.

What This Means For Daimler Going Forward

Obviously, this is a massive amount of money for any company. Daimler, the company that's in charge of Mercedes-Benz, believes that it will be cash strapped for the next three years. Mercedes has already announced cost-cutting measures, which include reducing its extensive lineup by cutting out models that aren't doing well. 

At the moment, we know that Mercedes has plans to cut coupes, convertibles, and sedans from its global lineup. It might not be the $25 billion settlement that Volkswagen agreed to for Dieselgate, but it's still a hefty amount of money.

Accusations of Daimler's emissions-cheating diesels first arrived in 2016 when the brand's clean-diesel vehicles were accused of having a device or software that cause the vehicles to pass U.S. emissions tests when they should have failed. 

By passing the tests, Daimler's diesel-powered vehicles were able to be used on the road, emitting more harmful pollution than they were supposed to. To remedy the situation, Daimler recalled roughly 800,000 vehicles globally. The automaker also paid approximately $960 last year as part of a separate settlement with the German government.

When the DOJ started to investigate Daimler's diesel vehicles, the automaker pulled its diesel-powered cars out of the U.S. With Volkswagen, Audi, and Daimler's diesel vehicles absent from the U.S. market, diesels have all but disappeared from America.

Prev                  Next
Writer's other posts
    Related Content