Daimler facing large fine as emissions investigation continues

12 August 2019

Daimler facing large fine as emissions investigation continues

12 August 2019

Daimler could be facing a fine of up to €1 billion for diesel-related violations as prosecutors in Stuttgart continue their investigation.

The German automotive authority KBA has found cheating software fitted to Mercedes-Benz C-Class and E-Class vehicles and has ordered the carmaker to recall 280,000 vehicles, according to Der Spiegel.

The Stuttgart prosecutors, according to the report, are considering a fine of up to €5,000 per vehicle. A spokesman for the prosecutor's office said the investigation was ongoing and would not be concluded before year-end, with the paper speculating that a decision could materialise as early as September.

Daimler declined to comment while the investigation was underway.

Cheat device

The software discovered on the cars could be used to alter emissions parameters while a vehicle was on test, lowering the output to achieve favourable results. It is not known if the software is the same used by Volkswagen in the Dieselgate scandal, a programme allegedly supplied to it by Bosch.

The announcement is further to a report in Bild am Sonntag earlier this year, which suggested that 60,000 Mercedes-Benz GLK 220 SUV models with Euro 5 engines had programmes installed to trick emissions tests. The KBA has initiated a formal hearing against the carmaker over these claims, Bild stated at the time.

The KBA believes there are further cases of software manipulation at the German carmaker, including its April findings, and has therefore not been able to provide the Federal Transport Ministry with a definitive fine as yet.

Employee case

Der Spiegel has also reported that the conclusion of criminal investigations against Daimler employees will not happen this year. The investigation has dragged on, the paper reports, because the carmaker has long objected to the evaluation of data seized from its headquarters during a raid in May 2017.

The prosecutors said it conducted the searches as part of a probe ‘against known and unknown employees at Daimler, suspected of fraud and misleading advertising connected to manipulated emissions treatment of diesel passenger cars.’

In July, Daimler reported a loss of €1.6 billion in its Q2 financial results, partially due to the need to increase risk provisioning for impending fines in connection with the diesel affair, according to the company.

Ongoing battle

Germany is pushing to eradicate any lasting memories of the Dieselgate scandal, which has brought about a collapse in the diesel market across Europe. Earlier this year, Porsche was fined €535 million for its part in the scandal, with Volkswagen receiving a €1 billion fine in its domestic market last year. Bosch has also been fined €90 million for its part in the deception.

Prosecutors in Munich also fined BMW €8.5 million for administrative lapses earlier this year, after the manufacturer admitted it had installed the wrong engine management in almost 8,000 vehicles, leading to higher nitrogen oxide (NOx) emissions.