Attorney General Jeff Jackson Wins Nearly $150 Million Settlement with Mercedes-Benz USA over Emissions Fraud

FOR IMMEDIATE RELEASE
Monday, December 22, 2025
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RALEIGH - Today, Attorney General Jeff Jackson and a coalition of 50 attorneys general reached a $149,673,750 settlement with Mercedes-Benz USA for unlawfully marketing and selling vehicles with devices designed to dodge emissions standards. Customers will also get more than $200 million in potential relief.

"Mercedes broke the law to sell cars that polluted the environment," said Attorney General Jeff Jackson. "The company rigged the cars so they passed emissions tests, but the cars were still spewing pollutants into the air at rates beyond what's legal. This settlement holds them accountable and makes sure they follow the law moving forward and pay customers back for the damage they've caused."

From 2008 to 2016, Mercedes allegedly made, advertised, and distributed more than 211,000 diesel passenger cars and vans that had software defeat devices. The devices were designed to turn on emission controls when the cars were going through emission tests and then reduce those controls during normal operations. The defeat devices enabled vehicles to far exceed the legal limits of nitrogen oxides emissions, a harmful pollutant that causes respiratory illness and forms smog.

Mercedes broke emissions standards to achieve design and performance goals, like increased fuel efficiency and reduced maintenance, that it couldn't meet if it was complying with emission standards. Mercedes concealed the existence of these defeat devices from state and federal regulators and the public. At the same time, Mercedes marketed the vehicles to consumers as "environmentally-friendly" and in compliance with applicable emissions regulations.  

As part of the settlement, Mercedes-Benz USA will pay $120 million to the states upon the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a comprehensive consumer relief program. The companies must also comply with reporting requirements, reform their practices, and accurately represent emissions and compliance to customers and the government.

The consumer relief program extends to the estimated 39,565 vehicles that had not been repaired or permanently removed from the road in the United States by August 1, 2023. Mercedes must pay for the installation of approved emission modification software on each of the affected vehicles. The companies must provide participating customers with an extended warranty and will pay $2,000 per subject vehicle.  

Today's settlement follows similar settlementsreached previously between the states and Volkswagen, Fiat Chrysler and German engineering company Robert Bosch GmbH over its development of the cheat software. Automaker Fiat Chrysler and its subsidiaries paid $72.5 million to the states in 2019. Bosch paid $98.7 million in 2019. Volkswagen reached a $570 million settlement with the states in 2016.   

Attorney General Jackson is joined in this settlement by the attorneys general of Connecticut, Delaware, Maryland, Alabama, Georgia, New Jersey, New York, South Carolina, Texas, Alaska, Arkansas, Colorado, the District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and Puerto Rico.

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