Mercedes-Benz is expected to face yet another setback for its diesel lineup in Germany, as the Federal Motor Transport Authority (KBA) is likely to rule that further models were equipped with the “impermissible defeat devices”.
An official annual analysis released by the company last Friday reports that Mercedes-Benz has temporarily suspended delivery and registration of certain models, anticipating the restraints.
The potential liability and regulatory costs have more than doubled to 4.9 billion Euros ($5.3 billion). The company underwent a massive earnings failure in 2019 and was forced to resort to cutting payouts to investors to the lowest level since the financial crises. The decision was also due to the 870 million Euros ($941 million) fine from the German prosecutors, Autonews Europe reports. Costs regarding massive recalling is also impacting the brand. KBA has already ordered a recall on nearly one million vehicles.
In an attempt to restore profit, Daimler also decided to cut up to 15,000 jobs, most of the cuts targeting executives.
A six-member special committee has been designated to keep an eye on the legal issues regarding “the complexity and antitrust related proceedings”. Daimler’s CEO Ola Kallenius is aware that the compliance with Europe’s ever more stringent emissions targets will be extremely tedious, as customers are still a long way from switching to electrified models and still choosing conventional propulsion.
Great so far at keeping away from the Dieselgate headlines, Daimler could though face fines of up to 1.5 billion Euros ($1.6 billion) over the upcoming two years if the luxury car maker fails to comply with the European emission regulations, as Bloomberg estimates. To escape the financial penalty, the company must grow sales of its zero-emission fleet to approximately 10% of its total deliveries in Europe by 2021. Last year, electric vehicles accounted for only 2.8% of the sales.