Daimler’s Dieselgate Will Cost $2.2 Billion To Settle With Consumers And U.S. Government

If you loved Volkswagen’s dieselgate scandal and couldn’t get enough of FCA’s ‘Dirty EcoDiesels’ spinoff, you’re in luck as Daimler has become the latest automaker to settle claims over their diesel engines.

In a statement, Daimler said they’ve reached an agreement, in principle, with various U.S. authorities including the Environmental Protection Agency, the California Air Resources Board, the California Attorney General’s Office, the U.S Department of Justice and U.S. Customs and Border Protection agency.

The company didn’t go into too many details, but said the settlement covers “civil and environmental claims regarding emission control systems” in approximately 250,000 diesel-powered cars and vans in the United States. The automaker has also decided to settle a separate class action lawsuit which is pending in U.S. District Court.

Also Read: FCA To Pay $800 Million For Its Dirty EcoDiesel Engines

The settlements will come with a hefty price tag as Daimler said the agreement with U.S. authorities will cost them approximately $1.5 (£1.1 / €1.3) billion. To settle the class action lawsuit, the company expects to pay around $700 (£536 / €593) million including attorneys’ fees and costs.

That’s a total of approximately $2.2 (£1.7 / €1.9) billion and Daimler said they also expect to spend an additional “mid three-digit-million EUR amount to fulfill requirements of the settlements.”

Needless to say, this will impact the company’s bottom line as their “free cash flow” will be affected for the next three years. Of course, the main financial impact will occur within the next 12 months.

Daimler said the settlements were in the best interest of the company and are an “important step towards legal certainty with respect to various diesel proceedings in the United States.” The company also noted the settlements aren’t final as they are subject to approval of relevant authorities and courts.

We’ll likely learn more once the settlements have been approved, but the class action lawsuit focused on BlueTEC diesel engines which were installed in a number of 2009-2016 models including the E-, S-, ML-, GL-, GLK- and R-Class as well as the Sprinter van.