WASHINGTON, Dec 22, 2025 – Mercedes-Benz has agreed to a $149.6 million settlement with U.S. states, Puerto Rico, and the District of Columbia to resolve allegations of diesel emissions cheating, effectively ending its legal challenges in the United States stemming from the dieselgate scandal. New York Attorney General Letitia James announced the settlement on Monday.

Under the agreement, Mercedes will provide $2,000 payments to eligible owners and lessees whose diesel vehicles received required emissions repairs. The settlement also requires the automaker to adopt measures to prevent future misconduct and comply with enhanced oversight requirements.

Authorities allege that Mercedes installed undisclosed software in diesel vehicles that masked true pollution levels during regulatory testing. In normal driving conditions, affected vehicles reportedly emitted 30 to 40 times the legal pollution limits.

Settlement Details and Financial Impact

The settlement covers an estimated 39,565 U.S. vehicles that had not been repaired or permanently removed from the road as of August 2023, according to Virginia Attorney General Jason Miyares. Mercedes will cover the costs for installing approved emissions modification software and provide extended warranties for participating consumers.

Mercedes confirmed that the settlement will not affect the company’s bottom-line earnings, noting that sufficient provisions have been made to cover the overall costs. Of the total settlement, $120 million will be paid immediately, while $29.6 million is suspended, with reductions applied for each vehicle repaired, bought back, or taken off the road.

This latest settlement follows a $2.2 billion agreement in 2020, which resolved U.S. government claims and lawsuits from 250,000 Mercedes-Benz owners. The 2025 settlement is part of continued legal scrutiny of the automaker following Volkswagen’s 2015 dieselgate scandal, which led to more than $20 billion in fines and penalties globally.

Global Legal Challenges Continue

Mercedes-Benz, along with other major automakers such as Ford, Nissan, and Renault, is still facing legal action in other countries, including a mass lawsuit in England filed in October 2025. The ongoing litigation highlights the continued global repercussions of diesel emissions scandals and the regulatory push for stricter compliance with environmental standards