Did a luxury badge come with a hidden emissions cheat? That is at the heart of a multistate settlement announced this week, in which Mercedes‑Benz agreed to pay nearly $150 million to resolve allegations its diesel vehicles were equipped with software that masked pollution during regulatory testing.
What the settlement says
State attorneys general and environmental regulators say more than 200,000 Mercedes diesel cars and trucks sold between 2008 and 2016 contained devices or software that reduced emissions only during laboratory testing, then allowed far higher pollution on the road. The coalition — which includes 50 state and local officials — reached a roughly $150 million deal with Mercedes‑Benz USA and parent Daimler AG. Reuters reported the figure as about $149.6 million, while other state announcements rounded the sum to “nearly $150 million.”
Officials allege Mercedes hid the existence of the devices from regulators and from buyers. Investigators who reviewed the cars’ performance said the vehicles sometimes emitted many times the legal limit in everyday driving — in some cases levels investigators compared to the excesses seen in other high‑profile diesel scandals.
Pennsylvania’s attorney general said the state will receive about $6.6 million from the settlement; New York announced it will receive multi‑million dollar relief that includes over $13.5 million aimed directly at affected drivers. The exact distribution varies by state: funds are being split among attorneys general offices, environmental agencies and transportation departments in places that took part in the negotiation.
What owners will get — and what it might cost Mercedes
Part of the deal is customer relief. According to state releases, Mercedes must offer participating owners free maintenance and installation of emissions modification software, an extended warranty on the repairs, and payments to consumers. Pennsylvania’s announcement cited a $2,000 payment per impacted vehicle as part of the relief program; other states laid out similar consumer remedies.
Officials also noted a subset of affected vehicles remained unrepaired or otherwise still on the road: Pennsylvania’s release referenced roughly 39,565 vehicles that had not been fixed or permanently removed as of an August 2023 snapshot. Those owners are eligible for the remedy program.
For Mercedes the settlement resolves civil claims by states without a long, drawn‑out trial — but it leaves open reputational fallout, potential private suits, and continued scrutiny from regulators who have grown more aggressive since the diesel scandals of the 2010s.
Legal and public‑health stakes are real. Emission standards exist to limit nitrogen oxides and other pollutants linked to respiratory and cardiovascular harms; regulators framed the settlement as both consumer protection and an air‑quality enforcement action.
A note for owners: if you think your Mercedes diesel from the 2008–2016 window might be affected, your state attorney general’s consumer page or your dealer should have guidance about enrolling in the repair/compensation program.
Why this matters beyond one automaker
The settlement is a reminder that the auto industry still wrestles with software, emissions controls and the gap between lab testing and real‑world driving. It also signals that states remain willing to coordinate on cross‑border corporate conduct — an approach that can be quicker and more straightforward than federal litigation.
For drivers who prize performance or fuel economy, the moment also raises questions about manufacturer transparency and the kinds of aftermarket fixes or factory updates that are acceptable. That tension — between official, sanctioned upgrades and third‑party mods — is playing out across the industry, from mainstream models to enthusiast aftermarket kits. (See how manufacturers are increasingly offering official performance packages in the SEMA world, including Ford’s recent move to sell factory‑backed turbo and supercharger kits.) Ford's official SEMA performance kits
And on the consumer side, some companies outside the auto world are leaning into repairability and transparency as selling points — a reminder that buyers often reward openness. Companies pushing repairable products are trying to turn that trend into a competitive advantage.
This Mercedes settlement will put money back in many state coffers and into owner pockets, but it leaves larger questions: will regulators push harder for tougher testing that reflects real driving conditions? Will automakers change how they design emissions‑control software and disclose its behavior? The answers will shape not only lawsuits, but the air people breathe and the rules that govern the cars they buy.
If you want to follow up: check your state attorney general’s website for program details and eligibility, and watch for dealer notices about required software updates or appointments.