Daimler, Deutsche Telekom End German Government Clash

Autoinformed.com on legal issues with autonomous automotive systems

One thing’s certain – this is an easy way to tax and automatically raise taxes.

Daimler reached an agreement with Deutsche Telekom and the German Federal Government concluding arbitration proceedings over the flawed launch of Toll Collect for heavy trucks. The dispute dragged on for 14 years. However, it’s a new beginning for Fresh Start, which is an automated toll collecting system for trucks, which is easily accomplished in other countries by other companies.

Whether this bodes ill for Daimler’s other car-to-car or car-to-infrastructure/web communications programs remains to be see. It also points to an unknown legal environment facing autonomous car makers with products already on the market – automatic driver-assist systems such as automatic braking, automatic parking, or vehicle-following speed control.

The deal – essentially an out of court plea bargain – involves a cash payment of, gulp, 1.1 billion euros (~$1.3 billion), split equally between the Daimler and Deutsche Telekom, according to Germany’s Transport Ministry. Daimler, the Stuttgart-based maker of Mercedes-Benz cars and trucks, said there will be a one-time EBIT charge of about 600 million euros in Q3. Daimler Financial Services will take the hit.

The agreed total settlement amounts to 3.2 billion (~$3.8B) euros. This includes allocated compensations since 2006 and the penalties paid (including interest on the amounts retained), the overall valuation of Toll Collect GmbH and the performance of the overall toll collection quality (bonus malus system).

Furthermore, it also includes a final payment amounting to 1.1 billion euros, which is equally divided between Daimler AG and Deutsche Telekom AG. For Daimler AG, because of the settlement, still subject to approval, a one-off negative EBIT effect amounting to 0.6 billion euros could arise that would impact the Daimler Group result in the current quarter and would be taken into consideration at Daimler Financial Services. Based on this negative one-time effect, Daimler now assumes that the result of Daimler Financial Services in 2018 will be in the magnitude of prior-year’s level. The expectation for the Group EBIT remains unchanged slightly higher level than in the previous year.

The settlement reached together with the Federal Ministry of Transport and Digital Infrastructure and Deutsche Telekom AG is “ fair and sensibly concludes for all involved a long-standing out-of-court dispute. The end of the arbitration proceedings after 14 years facilitates a fresh start for Toll Collect.”

The currently valid contract regarding operations ends on August 31, 2018. On September 1, 2018 the Federal Republic of Germany will acquire shares in Toll Collect GmbH and is then seeking to award the company at the end of award procedure by March 1, 2019.

€53 Billion in Toll Revenues

There’s real money involved, hence the legal issues. Collections by Toll Collect from the system’s launch to the end of 2017hs totaled 53 billion euros toll for the Federal Government. This, arguably, has benefited Germany’s infrastructure. Currently, the technical extension of the system is in progress to be able to collect tolls according to the Federal Government’s plans from July 1, 2018 on all Federal highways. One thing’s for sure this is an easy way to tax and automatically raise taxes.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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