Only Daimler doesn't believe they're illegal.
Earlier this month, German vehicle authority regulators, referred to as the KBA, discovered illegal diesel software in one Mercedes-Benz model, leading to suspicions of a far greater number of affected vehicles. Germany's Transport Minister Andreas Scheuer reportedly directly threatened Daimler, Mercedes' parent company, with a $4.4 billion fine for emissions rigging. Scheuer was concerned that up to 750,000 Mercedes vehicles could have the illegal defeat devices.
However, an updated Reuters report is claiming that figure has ballooned to 1 million vehicles, the bulk of Daimler's new Euro 6 diesel fleet. A Daimler spokesperson told German language newspaper Bild am Sonntag, who first reported the story, that the automaker was "cooperating to a full extent and transparently with the KBA and the federal transport ministry." Daimler has previously clashed with the KBA's findings regarding diesel emissions, and has maintained it has done nothing wrong. For example, Daimler said last month it plans to appeal the KBA recall order of the Mercedes Vito van powered by a 1.6-liter diesel.
Daimler does not believe its diesel engine software should be classified as illegal because its vehicles do not emit excess pollution without detection, as claimed by the KBA. Daimler's CEO is scheduled to meet with Scheuer again this week to discuss matters. So basically, the issue here is that German regulators believe Daimler's diesel emissions control software is faulty and thus illegal, while Daimler disputes that. Obviously the company does not want this to become a Volkswagen-size diesel scandal, so chances are a deal will be made in order to avoid pay such a big fine. Based on this and other diesel-related issues, it sounds like that engine technology is already more trouble than its worth.