Daimler AG is still suffering fallout from its diesel-cheating incident as German prosecutors are preparing to fine the company as much as 1 billion euros, or $1.2 billion, for violations related to the episode.
According to Der Spiegel, Mercedes-Benz parent company is set to be fined between 800 million euros, or $895 million, and 1 billion euros. KBA, Germany’s motor vehicle agency, discovered cheating software for Mercedes-Benz C- and E-Class Vehicles.
The automaker was ordered to recall 280,000 vehicles as a result. The Stuttgart-based prosecutor can fine the automaker as much as 5,000 euros for each vehicle, the magazine reported.
The prosecutor’s office said the investigation was ongoing and would not be concluded before year-end. Daimler declined to comment while the investigation was being conducted.
The fines loom as Daimler said this week Mercedes-Benz customers in Germany could apply for a 3,000 euro or $3,350 subsidy to upgrade the exhaust filters of older, polluting diesel vehicles. The expensive repair by is only the latest effort by German carmakers to avoid inner-city bans in their home country, according to the German media.
Carmakers have been forced to consider upgrading exhaust treatment systems on older cars after German cities started banning heavily polluting diesel vehicles to cut fine particulate matter and toxic nitrogen oxides.
Daimler has adamantly denied ever using the defeat device either in Europe or anywhere else. Nonetheless, the cost of recalls and other expenses related to diesel engines cost the company more than $2 billion and the expenses are continuing to climb quickly.
Daimler launched a website to process applications for financial support, as KBA seeks to approve an aftermarket kit to upgrade the exhaust systems on various Mercedes diesel passenger vehicles. However, this doesn’t account for the dieselgate-related vehicles.
In May 2017, German prosecutors searched Daimler offices as part of a fraud inquiry related to possible manipulation of exhaust gas after-treatment in diesel cars, Reuters reported.
Daimler is also being scrutinized by U.S. investigators as well. In February 2016, the U.S. Environmental Protection Agency asked Mercedes-Benz to explain emissions levels in some of its diesel cars.
Daimler has already been told to recall 700,000 diesel vehicles worldwide, including 280,000 in Germany, in connection with the Dieselgate scandal. KBA now insists that another 60,000 cars be added to the list, the tabloid said.
The fallout from “Dieselgate” has caught into Daimler’s earnings, contributing to the company’s $1-billion loss in the second quarter.