AG Office release (edited)
12/23/25
Attorney General Brenna Bird announced a settlement with Mercedes-Benz USA and Daimler AG of nearly $150 million for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling, and leasing vehicles equipped with illegal and undisclosed emissions defeat devices.
The states allege that more than 211,000 diesel passenger vehicles were equipped with the undisclosed emissions defeat devices from 2008 to 2016. Mercedes allegedly engaged in this conduct to achieve design and performance goals, such as increased fuel efficiency and reduced maintenance, that it would otherwise not be able to meet without the devices when attempting to comply with applicable emission standards. Mercedes hid the existence of the defeat devices from state and federal regulators and from Iowans purchasing the diesel vehicles.
Mercedes-Benz USA and Daimler AG have agreed to pay $120 million to the states on the effective date of the settlement. The rest will be suspended and potentially waived pending completion of a consumer relief program that extends to the estimated 39,000-plus vehicles that had not been repaired or permanently removed from the road by August 1, 2023. The consumer relief program provides eligible Iowans with $2,000 per subject vehicle following the installation of approved emission modification software at no cost to the vehicle owner, and an extended warranty.
Iowa was involved in similar multi-state settlements with Volkswagen, Fiat Chrysler and German engineering company Robert Bosch GmbH. Iowa will receive over $3.13 million through Monday’s settlement to be deposited in a state fund for future consumer litigation or education purposes.
Iowa joined the settlement that was co-led by Connecticut, Delaware, and Maryland along with Alabama, Georgia, New Jersey, New York, South Carolina, and Texas. The final settlement was also joined by the rest of the states.