December 22, 2025
(Anchorage, AK) – Alaska Attorney General Stephen Cox today joined a coalition of 50 attorneys general announcing a $149,673,750 settlement with Mercedes-Benz USA and Mercedes-Benz Group AG (collectively, “Mercedes”) for violating state laws prohibiting unfair or deceptive trade practices by marketing, selling and leasing vehicles equipped with illegal and undisclosed emissions defeat devices designed to circumvent emissions standards set by the federal government and in some states. Alaska will receive $250,000 through today’s settlement.
“Mercedes marketed these vehicles as ‘environmentally friendly’ not because it was true, but because that message played well,” said Attorney General Cox. “That kind of false virtue-signaling isn’t harmless: it deceives regulators and consumers, and it breaks the law. This settlement makes clear that behavior has consequences.”
Beginning in 2008 and continuing to 2016, the states allege Mercedes manufactured, marketed, advertised, and distributed nationwide more than 211,000 diesel passenger cars and vans equipped with software that optimized emission controls during emissions tests, while reducing those controls during normal operations. The states allege these software defeat devices enabled vehicles to far exceed many legal limits of nitrogen oxides (NOx) emissions, a harmful pollutant that causes respiratory illness and contributes to the formation of smog. Mercedes concealed the existence of these defeat devices from state and federal regulators and the public. At the same time, Mercedes marketed the vehicles to consumers as “environmentally-friendly” and in compliance with applicable emissions regulations.
Today’s settlement requires Mercedes to pay $120 million to the states immediately upon the effective date of the settlement. An additional $29,673,750 will be suspended and potentially waived pending completion of a comprehensive consumer relief program.
The consumer relief program extends to the estimated 39,565 vehicles, which as of Aug. 1, 2023, had not been repaired or permanently removed from the road in the United States. Mercedes must bear the cost of installing approved emission modification software on each of the affected vehicles. The company must provide consumers with an extended warranty and will pay consumers $2,000 per subject vehicle.
Today’s settlement follows similar settlements reached previously between the states and Volkswagen, Fiat Chrysler and German engineering company Robert Bosch GmbH over its development of the cheat software. Automaker Fiat Chrysler and its subsidiaries paid $72.5 million to the states in 2019. Bosch paid $98.7 million in 2019. Volkswagen reached a $570 million settlement with the states in 2016.
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Department Media Contacts: Communications Director Patty Sullivan at patty.sullivan@alaska.gov or (907) 269-6368. Information Officer Sam Curtis at sam.curtis@alaska.gov or (907) 269-6269.
