Mercedes-Benz settles with US over alleged emissions cheating

Mercedes-Benz and its parent company will pay about $1.5 billion after the Environmental Protection Agency (EPA) found it was cheating on its emissions test, the federal government announced Monday. 

EPA Administrator Andrew Wheeler told reporters the case involved more than 250,000 vehicles sold in the U.S. between 2009 and 2016 by German automaker Daimler AG. 

The expected $1.5 billion total will include $875 million in civil penalties as well as the cost of recalling the vehicles and funding for mitigation projects in California, which was also a plaintiff in the case.

“This is the second-largest civil penalty in the history of the Clean Air Act,” Wheeler said. 

Despite the settlement, Daimler denied the accusations of emissions cheating, saying in a statement that it “denies the authorities’ allegations as well as the class action plaintiffs’ claims and does not admit any liability to the United States, California, plaintiffs, or otherwise.”

To sell their vehicles in the U.S., automakers must prove they conform to the country’s emissions standards. Officials accused Daimler of using software tools called “defeat devices” that would show the vehicles appearing to be compliant in testing, even though they weren’t compliant when they were on the road. 

Wheeler said the software ensured the emissions controls were operating correctly under “test conditions” but “intentionally reduced its emissions controls” under “road conditions.”

Officials said this resulted in an increase in the emissions of nitrogen oxides, which can form smog. Nitrogen oxides can be harmful for people’s respiratory systems and can contribute to adverse environmental effects such as acid rain. 

The case appears to be smaller in scope than the cheating scandal involving Volkswagen, which impacted about 590,000 vehicles, but larger than alleged cheating by Fiat Chrysler, which involved about 100,000 vehicles. 

It also follows moves by the federal government to weaken Obama-era emissions and mileage standards. Under a rule finalized this year, automakers will have to produce fleets that average about 40 miles per gallon by 2026, as opposed to an Obama rule that would have required fleets to average almost 55 mpg by 2025. 

The Trump administration also revoked a waiver that gave California the authority to set its own stricter auto emissions standards.