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Mercedes Emissions Cheating in the U.S. Settled for $1.5 Billion

The Dieselgate scandal made a mess of Volkswagen, but it had also brought industry-wide emissions cheating to the attention of the public. Other automakers don’t appear to have received the memo, though, and this gets us to Daimler AG.
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After being caught in the wrong in South Korea in May 2020, the German automaker that controls Mercedes-Benz has settled with U.S. regulatory authorities over emissions cheating to the tune of $1.5 billion. For reference, the company’s overall earnings before interest and tax (a.k.a. EBIT) were $6.2 billion in 2019.

In other words, this settlement is going to cost Daimler AG a little under a fourth of the automaker’s EBIT figure. Additionally, the Germans have to fix the affected vehicle and pony up $700 million to settle consumer lawsuits in the United States.

“Further expenses” are also expected, but the three-pointed star has a reason to spend this kind of money in one go. “By settling these matters, lengthy court action with respective risks are avoided,” reads a statement from the German automaker. Reading between the lines, they know it’ll cost more to continue the legal fight rather than give consumers and authorities money to put an end to the allegations.

As opposed to the Dieselgate scandal, Mercedes won’t buy vehicles back over emissions problems. Affected models include 2009 to 2016 passenger cars and the 2010 to 2016 Sprinter with the BlueTEC II and Freightliner BlueTEC II turbo diesels. Fixing these vehicles will have to wait until the latter part of 2020, and the “emission modifications will be rolled out in different phases” according to Merc.

On an ending note, don’t you find it curious how the automaker that introduced diesel to passenger cars in February 1936 with the 260 D now has to pay for lying about the nitrous oxide generated by its diesel-engined cars and vans? When all is said and done, Mercedes is no longer the byword for German quality and reliability it used to be until the middle of the 1990s. At the time, the higher-ups made cuts wherever possible to boost production output and to improve profit margins.
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About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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