Mercedes-Benz has been accused of using emissions defeat devices in 774,000 diesel vehicles sold in Europe.
For their part, German firms have announced dozens of new electric and hybrid models for the coming years in a bid to bring down emissions of both greenhouse gas Carbon dioxide - the original reason they turned to diesel - and of harmful NOx.
A Daimler spokesman said he would not comment on the BamS story, adding, "We are cooperating to a full extent and transparently with the KBA and the federal transport ministry".
The affected diesel models found to be fitted with these devices are the C-Class, Vito and GLC models, as these were the main ones affected.
Yet T&E's 2016 survey showed Mercedes-Benz's average diesel fleet emitted 6.4 times the EU's NOx emissions limits, rating as worse than Ford, Kia, Toyota, Honda, Audi, Mazda and Jaguar Land Rover.
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.
German recall affects 220d versions of C-class and GLC, as well as some Vito vans.
Enlarge ImageMercedes-Benz is recalling 774,000 diesel models in Europe including examples of its GLC-Class SUV. Mercedes-Benz
Daimler boss Dieter Zetsche is set to meet with German Transport Minister Andreas Scheuer on Monday, after they met last week to discuss diesel emissions.
"Daimler says the applications in the motor control software the federal government has found fault with will be removed at the greatest possible speed and in cooperative transparency with the authorities", Scheuer said.
Zetsche or Daimler didn't say anything about what the company's software may be created to do, but it's the second large fix for the automaker in as many years. "Open legal questions will be clarified in the objection proceedings".
Exact details of the issue are yet to be revealed, but it's thought it relates to the AdBlue system.
The so-called "thermal switch" is set at a particular temperature.
It's all remarkably similar to the Volkswagen diesel-emissions scandal uncovered in September 2015, albeit on a much smaller scale.
The KBA has also hit VW-owned Audi and Porsche with emissions-related recalls this year, as well as BMW.