Yup, dieselgate isn’t just Volkswagen and it isn’t dead yet. But it soon might be, as Daimler has reached agreements that will cost it nearly US$3 billion (RM12.6 billion) to settle civil investigations by United States regulators and lawsuits from American vehicle owners.
This should once and for all end the inconvenience for the maker of Mercedes-Benz cars, which like the Volkswagen Group, was accused of using tricky software to cheat diesel emissions tests.
According to Reuters, the settlements in principle address civil and environmental claims tied to 250,000 diesel passenger cars and vans in the US and include claims from the country’s Environmental Protection Agency, Justice Department, California Air Resources Board (CARB) and the California Attorney General’s Office.
Daimler expects the costs of the settlements with US authorities to total $1.5 billion, while $700 million will be for settlement with owners. There will also be “further expenses of a mid three-digit-million euro amount to fulfil requirements of the settlements.”
A CARB spokesman confirmed that the settlement “will reach $1.5 billion and affects 250,000 vehicles nationwide.” The Californian agency said it would disclose more details after binding consent decrees with the US government agencies are filed with a US district court. This is anticipated to happen mid next month.
The German carmaker said it expects an impact on its free cash flow over the next three years as a result of this expensive settlement, with the main impact within the next 12 months.
As for the status of the investigations, Daimler previously said that it was the subject of a Justice Department criminal probe on the matter, but the status of that investigation was not mentioned in yesterday’s announcement. In September 2019, Daimler was fined 870 million euros by German prosecutors for breaking diesel emission regulations, and the carmaker did not contest the verdict, so the fire at home has been doused.
Dieselgate is synonymous with VW and it all started with the Wolfsburg carmaker, which in 2015 admitted to installing secret software on 580,000 US vehicles that allowed them to pass tests, but emit up to 40 times the legally allowable emissions. In total, VW agreed to pay more than $25 billion in the US for claims from owners, environmental regulators, states and dealers.
Also, Fiat Chrysler Automobiles last year reached a settlement worth about $800 million to resolve claims by regulators and owners that it used illegal software. FCA still faces an ongoing criminal probe.