Daimler Dieselgate

Getting closer to the truth about Daimler's diesels

Inside The 2017 North American International Auto Show (NAIAS)
This shiny electric Mercedes SUV might have to be the future faster than Daimler wants. Source: Bloomberg

When Janina Hübner bought a Mercedes-Benz G350 BlueTEC in March 2015, it seemed like a match made in heaven. For her, buying a luxury Mercedes SUV fulfilled a long-standing dream. For Daimler, the maker of Mercedes, Ms. Hübner was an ideal customer – a businesswoman based in Munich, a dog owner and a keen equestrian who drove her three-ton SUV in town and country, for work and leisure.

But today, Ms. Hübner says she no longer feels comfortable driving her diesel-engine car, which, following allegations of emissions manipulation on the part of Daimler, she now regards as a toxic menace. In a lawsuit against Daimler, she is demanding €55,000 ($68,000) in compensation for a car she claims is unusable and can’t be resold.

That amount of money means nothing to Daimler, which last year posted record sales and annual profits of €14.7 billion ($18.1 billion) and paid a bonus of nearly €6000 to each of its 130,000 German workers. But what counts for the carmaker is the potential precedent that the lawsuit establishes: A lawyer for Ms. Hübner, Thorsten Krause, says he was able to persuade the court to use an independent expert to establish exactly the levels of pollution her vehicle emits.

“My client has been cheated.”

Thorsten Krause, Lawyer representing the driver of a Mercedes SUV

That may sound like a mundane detail, but for Daimler – and perhaps other German automakers – it marks a potentially monumental turn. Even in the case of Volkswagen, no German court has called for independent experts to determine pollution levels. In previous cases, whenever outside parties like environmental NGOs gave their own pollution measurements, the car companies dismissed the data. If this move is now repeated by other courts, German carmakers potentially stand to lose whatever say they continue to maintain about the actual levels of pollution emitted by their diesel vehicles.

Daimler denies that it has engaged in emissions cheating. But the carmaker has been under increasing scrutiny. In May of last year, police in four German states staged raids on 11 Daimler locations as part of an investigation into suspected manipulation of emissions on some one million diesel cars. In the United States, authorities continue their own investigation, and Daimler faces class action suits not only from consumers, but from shareholders who have watched the company’s stock fall some 40 percent due to worries over the investigations.

While it remains to be seen whether Daimler made use of illegal tricks as alleged, what is clear is that software in Mercedes vehicles, as in the case of Volkswagen, under certain circumstances acts to reduce the use of Ad-Blue – the additive that removes toxins from Diesel emissions. Daimler says the software has nothing to do the illegal cheating that characterizes the Volkswagen case, but is necessary to avoid engine damage. Depending on the temperature, the company says, chemical processes involving Ad-Blue can create a slimy byproduct that can damage cables and other engine parts, thereby necessitating the software.

But an American investigation currently underway may cast doubt on this explanation: US investigators have found aspects of the software that appear to have little to do with protection of the motor. (Daimler says it is cooperating fully with the investigation and refuses to comment on it.) Moreover, earlier this week, German newspaper Bild reported on internal Daimler documents that it said show the carmaker’s own engineers questioned the legality of software used in diesel cars. Daimler, in response, played down the Bild report, saying US authorities know about those documents and have not filed a complaint.

Of course, that may still change as the investigations continue. In the meantime, a growing number of outraged Daimler customers aren’t waiting around for German or US authorities to conclude their probes.

“My client has been cheated,” said the lawyer for Ms. Hübner. “Daimler didn’t tell her the truth about the emissions levels.”

Sönke Iwersen leads Handelsblatt team of investigative reporters. Martin Murphy covers the steel, car and defense industries for Handelsblatt. Volker Votsmeier is an investigative reporter with Handelsblatt. To contact the authors: iwersen@handelsblatt.com, murphy@handelsblatt.com, votsmeier@handelsblatt.com

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