Huge payout over emissions cheat claims
Daimler AG and subsidiary Mercedes-Benz USA have agreed to pay US$1.5 billion – or about NZ$2.2b – to the US government and California state regulators to resolve allegations they cheated on emissions tests.
The Department of Justice, Environmental Protection Agency (EPA) and California attorney general’s office says Daimler violated environmental laws by using so-called “defeat device software” to circumvent emissions testing.
In doing so, the companies sold roughly 250,000 cars and vans between 2009 and 2016 with diesel engines that failed to meet state and federal standards.
The settlement, which includes civil penalties and still awaits court approval in Washington, will require Daimler to fix the already-sold vehicles.
Daimler must repair at least 85 per cent of affected cars within two years and at least 85 per cent of vans within three years. It must also offer extended warranties to drivers on certain vehicle parts and conduct emissions tests on the repaired vehicles each year for the next five years.
“By requiring Daimler to pay a steep penalty, fix its vehicles free of charge, and offset the pollution they caused, the settlement again demonstrates our commitment to enforcing environmental laws and protecting Americans from air pollution,” says Deputy Attorney General Jeffrey Rosen.
A separate class action civil settlement will bring a one-off charge of about US$700 million, Daimler AG says. In a statement, it also said settling the emissions allegations means Daimler does not admit any liability nor will the company have to buy back any of the vehicles in question.
Daimler AG didn’t make it clear just how the vehicles would be cleaned up or whether it was accused of any wrongdoing like Volkswagen, which paid US$2.8b to settle a criminal case that arose from cheating on emissions tests. Fiat Chrysler also is being investigated for allegedly cheating on emissions.
VW admitted that it turned on pollution controls when vehicles were being tested in EPA labs, then turned them off when the diesel vehicles were on real roads. VW duped the EPA for years before its scheme was discovered by a non-profit organisation and researchers at West Virginia University.
Daimler’s pollution practices also are being investigated in Germany, where civil lawsuits claim the vehicles emit more pollutants than advertised.
