By: Louise Kennedy These days, more of us than ever are realizing how events can take a sudden turn and present us with a financialread More
News, Defective Products
Lawsuit Accuses Luxury Car Dealer of Deceptive Marketing of Clean Diesel Engines
Mercedes-Benz recently came under fire for claiming its “Clean Diesel” engines, featured in the company’s BlueTEC models and advertised to consumers as a more environmentally friendly option, were emitting lower levels of pollutants when the vehicles were often creating more pollution.
A federal lawsuit was filed against the company in mid-February after it was discovered the vehicles contained a device that caused emission levels to violate US standards when the vehicles were run at cooler temperatures. The suit was brought against Mercedes-Benz by a vehicle owner in Illinois and is similar to one filed against Volkswagen by the same law firm.
A spokesman from Mercedes’ parent company Daimler AG called the claim “baseless” and stated the company would review the complaint and defend Mercedes. He further explained, “All our vehicles comply with regulatory frameworks… [and] are certified according to the laws.”
Following the announcement of the lawsuit, Daimler stock fell more than 4.0%, which is the company’s biggest single day decline since February 4th of this year. To date this year, shares have dropped 18%.
Volkswagen Admits to Deceptive Software Installation
Following similar accusations to those in the Mercedes-Benz case, Volkswagen admitted the company used software designed to cheat emissions testing in its vehicles, a revelation that caused a global stir in the vehicle industry.
Vehicle manufacturers admit tests conducted in their laboratories are often not the same as real-world emissions testing, but none have ever admitted to actually cheating the system. In-house testing often shows better results than what consumers experience and the company’s base their marketing claims on those initial results. However, it was assumed that no manufacturers were intentionally cheating the system.
Many believe the scandal has tarnished the image of diesel engines, which have long been touted by the vehicle industry as providing cleaner technology than other options.
Other manufacturers are facing challenges, too. In January, Renault SA shares dropped following a French raid that was part of a vehicle emissions probe, but no fraudulent systems were discovered during the event.
Device Interferes with Pollution Controls
According to the lawsuit regarding Mercedes-Benz’s Clean Diesel engines, the vehicles turn off pollution controls at temperatures below 50 degrees Fahrenheit, creating a violation of emissions standards. According to the law firm that filed the suit, the claims were based on an article in the February edition of Germany’s Der Spiegel magazine, claiming Mercedes admitted the shutoff is done to protect the engine.
The suit also names a Dutch study in which real-world testing showed the Mercedes C-Class 220 emitted more nitrogen oxide than compared to lab results. Researchers acknowledged real-world results are often higher than lab tests on emissions, but considered these results shockingly high.
The lawsuit accuses Mercedes of keeping the information about its BlueTEC engines from consumers and only focusing on the positive results that only occur under certain conditions, without revealing the company prioritized engine power and ignored the fact the emissions benefits were not the same at all temperatures. The suit is demanding Mercedes recall or replace for free all affected models and pay unspecified damages to US-based residents and entities that bought or leased any of the affected vehicles.