Attorney General James Secures $150 Million from Mercedes for Cheating Emissions Standards and Misleading Consumers

NEW YORK – New York Attorney General Letitia James and a bipartisan coalition of 50 other attorneys general today announced a nearly $150 million settlement with Mercedes-Benz USA (Mercedes), resolving violations of environmental and consumer protection laws stemming from the company’s use of illegal emissions-cheating software. A multistate investigation led by Attorney General James and eight other attorneys general found that Mercedes equipped hundreds of thousands of diesel vehicles with undisclosed software designed to cheat emissions tests, mislead consumers, and illegally pollute communities nationwide. Under the settlement, Mercedes will pay $149,673,750 to the coalition, including more than $13.5 million to New York to fight air pollution, and 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,” said Attorney General James. “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.”

“Thanks to strong leadership from Governor Hochul and Attorney General James, New York continues to advance a cleaner and healthier state for all New Yorkers,” said Department of Environmental Conservation Commissioner Amanda Lefton. “This multi-state settlement not only ensures accountability for bad actors using illegal emissions-cheating devices, it also importantly delivers more than $13.5 million to New York to reduce harmful emissions and help eligible consumers pay for costly vehicle repairs.”

Attorney General 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. 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.

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.

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

The matter was handled by Assistant Attorney General Ashley M. Gregor, former Assistant Attorney General Gavin McCabe, and Deputy Bureau Chief Lisa M. Burianek of the Environmental Protection Bureau, as well as Assistant Attorney General Noah H. Popp of the Consumer Frauds and Protection Bureau. The Environmental Protection Bureau is led by Bureau Chief Lemuel Srolovic and is part of the Division for Social Justice, led by Chief Deputy Attorney General Meghan Faux. The Consumer Frauds and Protection Bureau is led by Bureau Chief Jane M. Azia and Deputy Bureau Chief Laura J. Levine and is part of the Division for Economic Justice, led by Chief Deputy Attorney General Chris D’Angelo. Both the Division for Economic Justice and the Division for Social Justice are overseen by First Deputy Attorney General Jennifer Levy.