The Stuttgart-based carmaker has said the US Department of Justice has inquired about the company's emission certification processes, and that German prosecutors in Stuttgart are investigating Daimler employees on suspicion of fraud and criminal advertising.
It added that a total of 774,000 Mercedes vehicles being used across Europe contain the defeat devices. A device can be classified as illegal if exhaust filtering systems are deactivated too early or without good reason.
Daimler has previously clashed with the KBA's findings regarding diesel emissions, and has maintained it has done nothing wrong.
German Transport Minister Andreas Scheuer summoned Zetsche after the country's KBA Motor Vehicle Authority discovered "inadmissible defeat devices" in Mercedes-Benz engines, even as Daimler disputes they were illegal.
Five models in total are reported to be affected, including the volume-selling Mercedes C-Class - the UK's ninth most popular vehicle past year - and GLC SUV variants.
Germany's road vehicle authority KBA has found five "illegal switch-off devices" in Daimler auto engines, newspaper Bild am Sonntag (BamS) reported on Sunday.
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It's now unclear how many models in the United Kingdom are impacted.
This is specifically linked to two functions of the engine control in Mercedes-Benz Vito vans. "Those functions are part of a complex emission control system created to ensure robust emission control in different driving conditions and over the lifetime of a vehicle". A spokesman for the company declined to comment on specifics regarding the case, but said: "We are cooperating to a full extent and transparently with the KBA and the federal transport ministry".
'For the existence of the relevant test cycle NEDC, the specific programming in question is not required'.
Thus far, Daimler continues to deny any legal wrongdoing when it comes to diesels and the automaker will avoid any fines stemming from this issue as long as it carries out the recall.
Ellinghorst estimated the cost to Daimler to be less than 100 million euros.