Mercedes Benz to Pay 149.6 Million Dollars in Emissions Settlement Deal

Updated on Dec - 23 - 2025, 05:55 AM

Global automaker Mercedes-Benz USA and its parent company Daimler AG have agreed to pay 149.6 million dollars to settle allegations raised by attorneys general from 48 US states, Puerto Rico, and the District of Columbia. The case revolves around claims that the company used illegal software in certain diesel vehicles to manipulate emissions tests, allowing the cars to meet regulatory standards during testing while exceeding pollution limits during real-world driving.

The settlement follows years of investigation into diesel vehicles sold between 2008 and 2016. Authorities allege that these vehicles contained undisclosed defeat devices that reduced emissions only under laboratory conditions. In everyday use, the cars reportedly released higher levels of nitrogen oxides, a pollutant linked to respiratory illnesses, environmental damage, and smog formation. Regulators argue that this practice misled both consumers and environmental agencies.

Under the agreement, Mercedes-Benz will pay 120 million dollars directly to the participating states. An additional 29 million dollars may be waived if the company successfully implements a consumer relief program. As part of this initiative, eligible vehicle owners could receive compensation of around 2,000 dollars each, provided they agree to approved emissions software updates and extended warranties.

The company has stated that it has already made financial provisions for the settlement, suggesting that the payout will not have a major impact on its overall financial position. Mercedes-Benz is also required to continue updating affected vehicles with emissions-compliant software to ensure they meet environmental standards going forward.

While Mercedes-Benz has denied any wrongdoing, it agreed to the settlement to bring an end to ongoing civil litigation in the United States. This agreement comes on top of an earlier settlement reached in 2020, when the company paid approximately 1.5 billion dollars to federal and state regulators over related emissions concerns. Together, these cases highlight the long-term legal and financial consequences automakers face over emissions violations.

Environmental groups have welcomed the settlement, viewing it as a necessary step toward accountability and stronger enforcement of pollution regulations. Consumer advocates, meanwhile, are emphasizing the importance of ensuring that affected vehicle owners receive the promised compensation and repairs without unnecessary delays.

The Mercedes-Benz settlement reflects continued regulatory pressure on the auto industry and serves as another reminder of how emissions scandals have reshaped environmental oversight and corporate responsibility worldwide.