The German government has ordered Daimler to recall 774,000 vehicles in Europe. Said vehicles are powered by diesel engines that are believed to actually have higher NOx emissions than they’re supposed to.
Consultations were recently held between German government officials and Daimler chief executive Dieter Zetsche over suspicions that the carmaker had used illegal software.
In issuing an “immediate formal recall because of prohibited shutoff devices,” German Transport Minister Andreas Scheuer reinforced the government’s strict stance on diesel vehicles that pollute more than they should.
Transport Minister Andreas Scheuer threatened to fine Daimler $4.4 billion as recently as last week.
However, according to Evercore ISI analyst Ardnt Ellinghorst, the company has made a lucky escape as the recall doesn’t involve potentially costly fines.
“We don’t see any evidence that Daimler was designing software to deliberately cheat on emission testing. With this recall, fines are off the table,” he told Bloomberg.
To rectify the issues, Daimler will upgrade the engine software used by the Vito fitted with a 1.6-liter diesel engine from Renault. Additionally, certain diesel GLC and C-Class models will gain new software.
Despite the government order, Daimler said on Monday that it is considering an appeal and may go to court to overturn the order.
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