Mercedes-Benz will pay US$149.67 million (A$226.7 million) in a settlement with U.S. states over allegations that it added software to its cars to evade diesel emissions standards.
The investigation included attorneys general from 48 U.S. states, Puerto Rico, and the District of Columbia. These states found Mercedes marketed, sold, and leased vehicles with undisclosed software that falsely lowered emissions during testing, violating state laws on unfair trade practices.
“Mercedes-Benz hid devices inside their vehicles to cheat emissions tests, knowingly pumping out toxic emissions far exceeding legal limits. Their deception hurt their customers and harmed air quality for all Americans, and we’re holding them accountable,” said Connecticut Attorney General William Tong, who led the group of attorneys general.
“This settlement, as with others previously reached with Volkswagen and Fiat Chrysler, sends millions of dollars back to states as well as comprehensive relief for consumers who purchased these defective vehicles.”
“While the company has cooperated fully with the state attorneys general, Mercedes-Benz continues to regard the accusations made as unfounded and denies any liability to the U.S. states or otherwise,” wrote Mercedes.
As part of the settlement, Mercedes will additionally pay $2,000 to eligible owners and lessees of vehicles that were repaired to remove emissions standards-evasion technology. This includes 39,565 vehicles in the U.S.
Mercedes has already made provisions for the cost of the settlement, the company said. It will first pay $120 million to these states, with a remaining $29.67 million able to be waived if it completes its payments of $2,000 to consumers.
Mercedes is also involved in an ongoing trial in the United Kingdom for evading diesel emissions standards alongside fellow automakers like Ford and Nissan, with a verdict expected in mid-2026.
A similar investigation into Volkswagen cost the company more than $20 billion in fines and settlements globally after it said in 2015 that it had installed software to cheat emissions testing. Fiat Chrysler also paid $72.5 million to U.S. states in 2019 for the same issue.
Mercedes-Benz’s (ETR: MBG) share price closed at EU€59.17, down from its previous close at €59.84. Its market capitalisation is €57.21 billion.
