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Daimler to pay US Gov $1.5B to resolve emission cheating claims

Daimler to pay US Gov $1.5B to resolve emission cheating claims
Daimler to pay US Gov $1.5B to resolve emission cheating claims

Daimler, a renowned German carmaker and owner of Mercedes-Benz, has reportedly agreed to pay over $1.5 billion to resolve claims by the U.S. government that it specifically designed diesel vehicles that had the ability to cheat the country’s air pollution tests.

The US government investigated the company over allegations that it installed a software that allowed its vehicles to violate emission rules with over 250,000 Mercedes vans and cars estimated to be involved in the scam. U.S. officials also hope that this fine would prevent any future misbehavior by automotive firms.

The company stated that the agreement is a crucial step towards resolving diesel proceedings, however, it denied the government’s claims. By clearing the proceedings, the company would avoid lengthy court actions with the respective financial and legal risks associated.

Apart from paying the $1.5 billion settlement amount to the US government, the company also agreed to pay over $700 million to resolve a class action lawsuit that was brought to it by the vehicle owners. The company also unveiled further costs ranging in a mid-three-digit-million EUR to effectively cater to the demands of the settlements.

U.S. authorities stated that another $875 million fine was included within the $1.5 billion settlement would be the second-largest civil fine charged by the US under the Clear Air Act.

Daimler also agreed to take all the necessary measures to fix the affected vehicles that were sold between the years 2009 and 2016 with no extra cost to the car owners. Officials also stated that this commitment was worth approximately $400 million worth.

During a press conference, the chief of the US Environmental Protection Agency, Andrew Wheeler stated that the message sent through this penalty is clear. The government would impose the law and will catch any company that tries to mislead the public or cheat the government. Any company violating public trust to gain higher profits would lose both the public’s trust as well as profits.

Source credit: https://www.bbc.com/news/business-54153126