Mercedes agrees $150 million settlement with US states over diesel scandal

Mercedes says the deal ends its dieselgate legal issues in the United States Says bottom-line earnings will not be affected Settlements are subject to final court approval By David Shepardson and Rachel More WASHINGTON, Dec 22 (Reuters) - Mercedes-Benz (MBGn.DE) has reached a $149.6 million settlement with U.S. states to resolve a long-running investigation into allegations of diesel emissions cheating by the German automaker, New York Attorney General Letitia James said Monday. The automaker said the deal effectively ends its legal issues in the United States over dieselgate - the emissions scandal first uncovered at Volkswagen (VOWG_p.DE) in September 2015. Under the settlement with 48 U.S. states, Puerto Rico and the District of Columbia, Mercedes will pay $149.6 million and provide $2,000 payments to eligible owners and lessees whose vehicles received required emissions repairs. Mercedes also agreed to adopt a series of actions to prevent future misconduct and comply with oversight requirements, the states said. The states said Mercedes installed undisclosed unlawful software in diesel vehicles that hid the true levels of pollution and improperly lowered emissions during government testing, but in normal driving conditions, the vehicles emitted up to 30 or 40 times the legal limit. MERCEDES SAYS GROUP’S BOTTOM-LINE WILL NOT BE AFFECTED Virginia Attorney General Jason Miyares said the settlement extends to the estimated 39,565 U.S. vehicles that had not been repaired or permanently removed from the road by August 2023. Mercedes must pay the costs for installing approved emission modification software on each of the affected vehicles and provide participating consumers with an extended warranty and pay consumers $2,000 per vehicle. A Mercedes spokesperson said the group’s bottom-line earnings would not be affected and that “a sufficient provision has been made for the costs of the overall settlement”. The settlements are subject to final court approval, the company said in a statement. In 2020, Mercedes-Benz agreed to pay $2.2 billion to resolve a U.S. government diesel emissions cheating investigation and claims from 250,000 U.S. vehicle owners. As part of the settlement with the states announced on Monday, the automaker must immediately pay $120 million to the states. A further $29.6 million is suspended and will be reduced by $750 for each affected vehicle Mercedes repairs, takes off the market, or buys back. The states launched an investigation into Mercedes-Benz in 2020 following Volkswagen’s diesel emissions scandal that cost VW more than $20 billion in fines, penalties and settlements after it admitted in 2015 it had cheated emissions tests by installing “defeat devices” and sophisticated software in nearly 11 million vehicles worldwide. Some of the world’s biggest automakers continue to face legal action over the scandal. Mercedes faces further potential payouts, for example in England, where it is one of several companies alongside Ford (F.N) , Nissan (7201.T) and Renault (RENA.PA) facing a mass lawsuit launched in October.