Daimler will settle its diesel emissions cheating scandal with the US for over $2 billion

Daimler, the parent company of Mercedes-Benz, is paying over $2 billion to make its own diesel emissions cheating scandal go away in the United States.

The company announced on Thursday that it has reached a $1.5 billion settlement with US authorities, including 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, winding up a four-year probe that kicked off following Volkswagen’s Dieselgate scandal. Daimler has also settled a separate class action lawsuit from vehicle owners to the tune of $700 million, including attorneys’ fees.

In 2019, Germany’s auto regulator found that approximately 280,000 Mercedes-Benz C-class and E-class vehicles had been outfitted with software that enabled them to cheat on their emissions tests and emit more harmful pollution during real-world driving. This was very similar to the emissions test fraud pulled off by Volkswagen, though on a smaller scale. VW’s scandal, which was first discovered in 2015, has cost the automaker nearly $35 billion in fines and settlements to date, with several VW executives sent to prison.

The US Justice Department increased its scrutiny of diesel emissions testing in the wake of the discovery of Volkswagen’s scandal, directing Daimler to investigate the certification process of its cars. In response, Daimler has had to recall nearly 800,000 vehicles around the world. Last year, the automaker was ordered to pay an €870 million (roughly $960 million) fine as part of a separate settlement with German prosecutors.

Daimler stopped selling diesel vehicles in the US in 2016, around the same time that the DOJ-led probe began. The California Attorney General’s Office and Department of Justice did not immediately respond to requests for comment. The EPA and a lawyer representing Mercedes-Benz owners in the US class action case declined to comment. A representative CARB said they would be able to provide more details after the consent decree is filed in court, which is currently anticipated for mid-September.

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