Daimler Halts Delivery And Registration Of Certain Diesel Models

Daimler is expecting Mercedes-Benz diesel sales in Europe to hit a snag over legal and regulatory costs.

Daimler is expecting a further crackdown on Mercedes-Benz diesel vehicles in Germany, as the country’s motor industry watchdog, the KBA, will likely rule that other models built by the automaker were also “equipped with impermissible defeat devices,” according to an official annual report.

The report also said that Daimler has temporarily halted delivery and registration of certain models, anticipating problems.

The German brand boosted total provisions to 30.7 billion euros ($33.2 billion) from 23 billion euros ($24 billion), as potential liability and regulatory costs have more than doubled to 4.9 billion euros ($5.3 billion).

Daimler suffered a massive earnings drop last year and was forced to cut its payout to investors to the lowest level since the last financial crisis – partly because of an 870 million euro ($941 million) fine from German prosecutors, reports Autonews Europe.

Now, the company’s supervisory board has created a six-member special committee to focus on legal issues “against the backdrop of the complexity of the emissions and antitrust related proceedings.”

CEO Ola Kallenius meanwhile acknowledged that complying with Europe’s emissions targets will be challenging over the next two years, because consumers might not gravitate to electrified models quick enough.

Daimler could face more than 1.5 billion euros ($1.6 billion) in fines over the next two years for missing its European CO2 limits, as per BloombergNEF estimates. In order to avoid that, EV sales will have to account for roughly 10% of total deliveries for Europe by 2021, compared to last year’s 2.8%.

As for how the Stuttgart-based carmaker is handling the Coronavirus outbreak, it seems that the latter “may not only affect the development of unit sales, but may also lead to significant adverse effects on production, the procurement market and the supply chain.”

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