Billion-euro fine for Daimler diesels

German prosecutors are set to slam Mercedes-Benz’s parent company, Daimler, with a fine of up to a billion euros for emissions-cheating diesel cars.

German magazine Der Spiegel has reported that a fine of between €800 million and €1 billion will be meted out by Stuttgart prosecutors after the German transport department (KBA) found software cheats in nearly 300,000 of its cars.

In a rare move, the C-Class and E-Class cars were ordered to be recalled after Daimler initially refused to do it voluntarily and the Stuttgart public prosecutor is considering a fine of up to €5000 for each cheater car sold.

The prosecutor’s office said the investigation was ongoing and was unlikely to be completed before the end of the year, while Daimler refused to comment.

Speculation over the looming diesel-cheating fine has had an impact on Daimler’s share price far beyond the billion-euro fine, though.

With new CEO Ola Kallenius at the helm, Daimler shares have tumbled from €59.94 in April to €41.4 yesterday on the back of repeated warnings of both revenue figures and building up a buffer for whatever diesel-cheating fine was coming its way.

That means its market capitalisation fell from €71.2 billion to €50.2 billion, with Daimler losing €21 billion in overall worth along the way.

Daimler was probed several times in the wake of the Volkswagen Dieselgate scandal. It was never publicly drawn in to the €28 billion scandal, though it cheated in its own ways, including thermal switching that turned off the emissions scrubbing below six degrees Celsius and above 28 degrees.

There were at least two other possible cheating processes being investigated by Stuttgart prosecutors.

It is also under investigation by United States authorities for cheating in America with its diesel engines.

It’s not the first and won’t be the last German car-maker to be fined for diesel emissions cheating, following Volkswagen, Audi and Porsche (though, to be fair, Porsche simply bolted in Audi’s diesel engines).

Porsche was fined €535 million euros from Stuttgart prosecutors (who also gave Bosch a €90 million fine), Volkswagen was hit with another €1 billion from Braunschweig prosecutors and Audi scored an €800 million fine from Munich prosecutors.