Mercedes-Benz To Pay $150M Over 'Deceptive Practices'

In the mid-2010s, the auto industry became embroiled in a years-long period of scandal, bad press, and economic damage caused by diesel engines and the emission rules surrounding them. More specifically, the way that certain automakers cheated to ensure that their cars tested cleaner than they actually were.  Volkswagen's infamous "Dieselgate" scandal was by far the biggest and most publicized of these 2010s-era diesel disasters, but VW wasn't the only automaker to have its troubles in this area. 

Though automakers have done their best to try to push the Dieselgate era out of the public mind and into the history books, the financial effects of this period are still being felt today. In December 2025, 48 U.S. states, along with Puerto Rico and Washington, D.C., announced a $150 million settlement with Mercedes-Benz over what they claim were unfair or deceptive trade practices regarding the emissions of its diesel-powered vehicles.

Though the lawsuit and settlement are centered on vehicles that are now over 10 years old, the result shows the ongoing residual damage caused by these emissions cheating scandals. In the years since, companies like Mercedes and Volkswagen have pivoted toward electric vehicles, partially to help wash out the bad taste of this era and improve their environmental image, but the broader costs are still being paid.

The diesel emissions scandals of the 2010s were far-reaching and, in many ways, upended the entire automotive industry. It wasn't just import brands like Volkswagen that were affected, either. American-made Cummins-powered trucks were affected by a costly emissions cheating scheme as well. For the most part, the general public likely isn't thinking or talking about these diesel emissions scandals more than a decade on from them, but it turns out that lawmakers still very much are.

According to the Utah Department of Commerce, the states went after Mercedes-Benz because it "deceptively certified, marketed, and sold" over 200,000 BlueTEC diesel-powered cars and light trucks between 2008 and 2017. By and large, the Mercedes scandal plays out almost the same as VW's more publicized one. Mercedes-Benz was accused of using defeat devices that would make their engines perform differently during emissions testing than in real-world scenarios. Thus, the engines would produce far more nitrogen oxide emissions than what was legally permitted when driven on the road.

Mercedes-Benz has been ordered to pay $120 million — split between the various states — upfront for the unlawful use of defeat devices to circumvent emissions laws, as well as the environmental harm that the illegal diesel emissions caused. The rest of the $150 million fine has been suspended, pending the completion of a compensation program. This all comes in addition to a larger $1.5 billion fine issued to the automaker in 2020 on behalf of the state of California and the U.S. federal government.

The consequence of the cheating, as you'd imagine, is multifaceted. For one, Mercedes is being held accountable to owners for lying about the emissions impact of its vehicles and marketing their supposed environmental-friendliness to buyers. For the approximately 40,000 affected vehicles estimated to still be on the road, however, Mercedes has been tasked with paying for modifications, issuing extended warranties, and making a $2,000 cash payment for each affected vehicle, with the remaining $29.6 million of the fine to be waived upon completion.

This latest Mercedes settlement not only serves as a reminder of how much Dieselgate shook up the industry, but also how Volkswagen's troubles led to many other car companies being exposed for using similar tactics – even if some situations were more egregious than others. And though the penalties levied against Mercedes-Benz are substantial, they still pale in comparison to the estimated $33 billion that Dieselgate cost Volkswagen. The settlement also represents the latest in a series of challenges for Mercedes-Benz, which saw a 70% drop in operating profit for Q3 2025 and a sharp decline in American EV sales.  

Dieselgate and its associated industry-wide ripples will certainly go down as a low point for the modern auto industry. Even today, the legacy of these scandals continues to be present in a lot of different ways, be it in the form of these ongoing lawsuits or the hundreds of thousands of VWs left abandoned in the California desert.