Mercedes Benz reaches $149.6 million settlement with US states over diesel emissions

• Affected vehicle owners will receive $2,000 payments plus free emissions repairs and extended warranties, with Mercedes paying $120 million immediately to states
• The settlement follows a previous $2.2 billion agreement in 2020 with the U.S. government and 250,000 vehicle owners
• Mercedes maintains the settlement won't impact bottom-line earnings as provisions were already made, though the company still faces potential legal action in other countries including England

Mercedes-Benz Settles U.S. Diesel Emissions Case for $149.6 Million

Mercedes-Benz has agreed to pay $149.6 million to settle investigations by 48 U.S. states, Puerto Rico, and the District of Columbia over diesel emissions cheating allegations. The settlement, announced by New York Attorney General Letitia James, effectively concludes Mercedes' "dieselgate" legal issues in the United States.

Key Settlement Terms:

• $120 million immediate payment to states
• $29.6 million suspended (reduced by $750 per vehicle repaired/removed)
• $2,000 payments to eligible vehicle owners/lessees who received emissions repairs
• Extended warranties for affected vehicles
• Compliance oversight requirements

The investigation found Mercedes installed undisclosed software in diesel vehicles that concealed actual pollution levels during government testing. Under normal driving conditions, these vehicles emitted 30-40 times the legal pollution limit. Approximately 39,565 U.S. vehicles remained unrepaired or on the road as of August 2023.

Financial Impact:

Mercedes confirmed the settlement will not affect bottom-line earnings, stating sufficient provisions have been made. This follows a previous $2.2 billion settlement in 2020 with the U.S. government and 250,000 vehicle owners.

Market Context:

The diesel emissions scandal originated with Volkswagen in 2015, costing VW over $20 billion in fines and settlements. Mercedes continues to face potential liabilities internationally, including legal action in England alongside Ford, Nissan, and Renault.

The settlements remain subject to final court approval. This resolution removes a significant regulatory overhang for Mercedes in the U.S. market, though international diesel-related litigation risks persist.