Mercedes Says Its Annual CAFE Fines Are a Thing of the Past

Mercedes Says Its Annual CAFE Fines Are a Thing of the Past

By John O'Dell March 12, 2010

Mercedes-Benz, which has paid more than $200 million in fines since 1983 for failing to meet annual U.S. fuel economy standards, says it has its fuel efficiency program dialed in now and isn't likely to be fined for 2010 and beyond.

For 2009, though, the automaker may have to pony up a little bit of cash, product development chief Thomas Weber told the German auto magazine Automobilwoche.

"We aren't likely to pay much in the way of penalties" for failing to meet the U.S. CAFE (corporate average fuel economy) standard of 27.5 mpg for 2009, Weber told the magazine in an interview reported by the industry trade journal Automotive News.

"From 2010 on, we won't pay anything. That is clearly our goal," Weber said.

In the past, automakers specializing in large or performance cars - Mercedes, Porsche and BMW especially - have found it cheaper to pay the annual fine for falling below the mandated corporate fuel efficiency average than to modify their vehicles engines, and performance, to achieve the same goals companies such as Toyota, Honda, Ford and GM routinely meet.

But as fuel efficiency has taken on a more critical role - signaling a car maker's environmental  commitment and willingness to help reduce greenhouse gases and dependence on oil - CAFE violations have become a negative that competitors can use in advertising campaigns.

Additionally, with the CAFE standard climbing almost 40 percent to 35.5 mpg by 2016, the fines for violations - levied on the basis of how many miles per gallon beneath the standard a car maker's fleet average fell - are likely to be steeper and less affordable.

CAFE fines for 2009 haven't been assessed, but after paying $28.9 million in 2007 and a record $30.3 million in 2006, Mercedes-Benz was fined only $6.8 million in 2008.

John O'Dell:  is an AutoObserver Senior Editor. Follow @AutoObserver on Twitter.