HARRISBURG, PA — Mercedes-Benz USA will pay $149 million to settle allegations that it secretly equipped hundreds of thousands of diesel vehicles with software designed to cheat emissions tests, Pennsylvania Attorney General Dave Sunday announced alongside a coalition of all 50 state attorneys general.
The settlement resolves claims that, between 2008 and 2016, the luxury automaker manufactured and sold more than 200,000 diesel passenger cars and vans nationwide that contained undisclosed “defeat devices.” Regulators allege the software made vehicles appear compliant with emissions standards during laboratory testing, while allowing nitrogen oxide emissions to far exceed legal limits during real-world driving.
Nitrogen oxide is a harmful pollutant linked to respiratory illnesses and smog formation.
Pennsylvania will receive approximately $6.6 million from the settlement, with funds allocated among the Office of Attorney General, the Department of Environmental Protection, and the Department of Transportation. State officials said more than 10,500 of the affected vehicles were sold or registered in Pennsylvania.
“This luxury-vehicle manufacturer cut corners to make their products more attractive to consumers, while blatantly lying about the vehicles achieving emissions standards,” Sunday said. He added that emissions regulations are designed to protect public health and the environment, and that the agreement compels Mercedes to increase transparency while offering affected consumers free emissions-related repairs.
According to the settlement, Mercedes allegedly used the defeat devices to meet performance and design goals such as improved fuel efficiency and reduced maintenance costs—targets the company was unable to achieve while complying with emissions laws. Regulators contend Mercedes concealed the existence of the software from consumers and state and federal authorities while marketing the vehicles as environmentally friendly and emissions-compliant.
Under the agreement, Mercedes-Benz USA will pay $120 million to the states once the settlement takes effect. An additional $29.7 million will be suspended and potentially waived if the company fully completes a comprehensive consumer relief program.
That program applies to an estimated 39,565 vehicles that, as of August 1, 2021, had not been repaired or permanently removed from U.S. roads. Mercedes is required to install approved emissions-modification software at no cost, provide extended warranties to participating consumers, and pay $2,000 per affected vehicle.
The settlement also imposes new reporting obligations and mandates reforms to Mercedes’ business practices, including prohibitions against deceptive marketing of diesel vehicles and misrepresentations about emissions compliance.
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