Attorney General Letitia James and a bipartisan coalition of 50 other attorneys general announced they have reached a settlement of nearly $150 million with Mercedes-Benz USA. The settlement resolves violations of environmental and consumer protection laws stemming from the company’s use of illegal emissions-cheating software. Of that amount, New York will receive more than $13.5 million to fight air pollution.
James and the coalition launched an investigation in 2020 following the conclusion of a similar federal investigation. As part of a nine-state executive committee, the Office of the Attorney General (OAG) reviewed more than 350,000 documents and interviewed numerous witnesses. The coalition found that Mercedes installed undisclosed software in its diesel vehicles that masked the true level of pollution they produced.
These devices artificially lowered emissions during government testing, but in normal driving conditions, the vehicles emitted far higher levels of harmful pollutants, sometimes up to 30 or 40 times the legal limit, according to the investigation. This unlawful software enabled Mercedes to obtain emissions certifications that the vehicles did not actually qualify for.
The investigation also found that Mercedes misled consumers by advertising these diesel vehicles as “clean” and “green” vehicles that produced “ultra-low emissions.” Mercedes claimed to offer “the world’s cleanest diesel automobiles” and touted its products’ ability to convert pollutants into “pure, earth-friendly nitrogen and water.” In reality, the vehicles emitted far more pollution than permitted and did not operate as advertised or certified. Between 2008 and 2017,
Mercedes sold more than 200,000 diesel vehicles equipped with this software, including more than 19,000 vehicles registered in New York, according to the OAG.
In addition to the settlement, the auto manufacturer will provide $2,000 payments to eligible owners and lessees whose vehicles receive the required emissions repairs. The company must also undertake broad corrective actions to prevent future misconduct and comply with strict oversight requirements.
“Mercedes promised New Yorkers clean, green cars, but instead sold vehicles that polluted our air and put public health at risk,” James said. “For nearly a decade, Mercedes misled regulators and consumers while its vehicles spewed toxic emissions into our communities. Today’s settlement holds Mercedes accountable, delivers millions of dollars to protect New York’s environment, and ensures that this company never again deceives the public about its emissions.”
As part of the settlement, Mercedes will immediately pay $120 million to the coalition states, including $13,530,088 for New York, to support efforts to prevent, abate, and mitigate air pollution. An additional $29,673,750 penalty is temporarily suspended and will be reduced by $750 for each affected vehicle Mercedes repairs, takes off the market, or buys back. To encourage repairs, Mercedes must provide $2,000 payments to eligible owners and lessees whose vehicles receive an Approved Emissions Modification (AEM). To obtain this payment, owners and lessees of affected vehicles must submit a valid claim by September 30, 2026. Mercedes is required to mail notices to eligible owners and lessees explaining how to participate. The company will also provide an extended emissions warranty for vehicles that receive the modification.
Mercedes must also implement sweeping reforms to prevent future violations and comply with new reporting requirements. Mercedes is prohibited from selling or leasing any diesel vehicles equipped with these illegal emissions-cheating devices, from making misleading statements about a vehicle’s emissions performance, and from claiming a diesel vehicle is clean or low-pollution unless the claim is accurate and substantiated.
The company must also comply with requirements previously imposed in federal court. Mercedes must regularly report to state regulators which vehicles have been repaired or removed from the road and may face additional penalties depending on its compliance.
Attempts to reach Mercedes-Benz were unsuccessful.