DAILMER TO PAY $1.5B over US emissions cheat claims

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The US Department of Justice (DOJ), US Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) announced Monday that German automobile manufacturer Daimler agreed to pay $1.5 billion to resolve alleged violations of the Clean Air Act and California law associated with emissions cheating.

To sell a new model year vehicle in the US, vehicles manufacturers must apply for and receive a certificate of conformity from the EPA. To receive the certificate, manufacturers must show through testing that a vehicle meets all applicable emissions standards. They must also disclose all auxiliary emission control devices (AECDs) and defeat devices, which cause a vehicle’s emission control systems to operate less effectively during normal driving conditions than during emission tests.

The US and CARB filed separate civil complaints alleging that Daimler manufactured and sold more than 250,000 diesel vehicles with undisclosed AECDs and defeat devices. Daimler was investigated for installing the software in 250,000 Mercedes cars and vans.

The DOJ, EPA and CARB announced a proposed settlement on Monday, under which Daimler would pay $1.5 billion to resolve these allegations. Daimler also agreed to a class action settlement of about $700 million.

As part of the settlement, Daimler will be required to implement a recall and repair program to remove all defeat devices, and it must repair at least 85 percent of the affected cars within two years. The company will be required to offer an extended warranty for all updated software and hardware, as well as to test repaired vehicles annually for the next five years.

On the settlement, Deputy Attorney General Jeffrey Rosen stated, “By requiring Daimler to pay a steep penalty, fix its vehicles free of charge, and offset the pollution they caused, today’s settlement again demonstrates our commitment to enforcing our nation’s environmental laws and protecting Americans from air pollution.”

The proposed settlement must be reviewed and approved by a court, and it is also subject to a 30-day public comment period.