Daimler AG, the parent company of car maker Mercedes-Benz, predicts it will spend over $2 billion to settle emission tampering allegations by U.S. regulators and a related class-action lawsuit.

The proposed settlements, announced by Daimler on Aug. 13, will involve the company spending $1.5 billion to resolve allegations by U.S. regulators that it tampered with the emissions of 250,000 diesel passenger cars and trucks sold in the United States. In addition, the company expects to spend an additional $700 million to settle a U.S. federal class-action lawsuit filed on behalf of its customers, as well as “further expenses of a mid-three-digit-million EUR amount to fulfill requirements of the settlements.”

“The company has cooperated fully with the U.S. authorities and continues to do so,” Daimler said in a statement. “With the proposed settlements, the company takes an important step towards legal certainty with respect to various diesel proceedings in the United States.”

Daimler’s actions also came under the scrutiny of German regulators, who fined the company €870 million (U.S. $960 million) in sanctions and disgorgement in 2019 for allegedly tampering with the emissions of 684,000 cars in Europe.

Daimler’s emissions violations follow Dieselgate, the much larger scandal perpetrated by another German car manufacturer, Volkswagen.

It is estimated that Volkswagen has spent over $33 billion so far to resolve Dieselgate, according to a recent story in auto industry news site Ward’s Auto. The U.S. Securities and Exchange Commission also charged Volkswagen, two subsidiaries, and its former CEO with defrauding U.S. investors.

Volkswagen and Daimler are two of a long list of auto makers embroiled in emissions scandals with U.S. regulators.

The proposed settlements for Daimler involve the U.S. Environmental Protection Agency, the California Air Resources Board, the Environment and Natural Resources Division of the Department of Justice, the California Attorney General’s Office, and U.S. Customs and Border Protection.

The settlements still have to be approved by regulators and the federal judge overseeing the class-action lawsuit before the U.S. District Court for the District of New Jersey.

 

Aaron Nicodemus covers regulatory policy and compliance trends for Compliance Week. He previously worked as a reporter for Bloomberg Law and as business editor at the Telegram & Gazette in Worcester, Mass.

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