VW reaches settlement in US
VW HAS agreed to pay out $14.7bn in a US settlement over its emissions scandal, pledging to buy back or fix cars that tricked pollution tests, and compensate owners.
VOLKSWAGEN (VW) has agreed to pay out $14.7bn in a US settlement over its emissions-cheating diesel-powered cars, pledging to buy back or fix cars that tricked pollution tests, and pay each owner up to $10,000 in cash.
The huge settlement filed in federal court on Tuesday gives the first indication of the financial cost to the German vehicle giant of the months-long scandal unfolding on both sides of the Atlantic over its fraudulent practices.
Under the deal, VW agreed to create a pool of $10bn to compensate owners, and pay a $2.7bn environmental penalty that will help remediate pollution around the US. The company will invest an additional $2bn “to create infrastructure for and promote public awareness of zero emission vehicles”, the court filing showed.
The settlement, which must be approved by a federal judge in San Francisco who is overseeing the litigation, could affect about 480,000 owners of VWs and Audis with 2l diesel engines.
Deputy US attorney-general Sally Yates told a news conference the investigation was not yet over.
“This partial settlement marks a significant first step towards holding VW accountable for what was a breach of its legal duties and a breach of the public’s trust,” she said. “And while this announcement is an important step forward, let me be clear, it is by no means the last. We will continue to follow the facts wherever they go.”
Yates noted that the settlement did not cover civil penalties for violations of the Clean Air Act or a criminal investigation.
The deal does not affect a parallel probe into the company’s 3l diesel engines.
She said, however, that the deal would offer compensation to consumers and help remediate air pollution. “We can’t undo the damage that VW caused to our air quality but what we can do is offset that damage by reducing pollution from other sources,” she said.
VW admitted in September that it had installed software in the vehicles that tricked US emissions tests into showing the cars met environmental standards.
The affected vehicles include 2009 to 2015 Volkswagen TDI diesel models of Jettas, Passats, Golfs, and Beetles, as well as the TDI Audi A3.
VW — which had an annual turnover of €210bn for 2015 — has set aside €16.2bn to cover costs from the scandal, including the legal risks. The company is facing similar charges and litigation in Europe and elsewhere for the same issues. Tuesday’s settlement filed with Judge Charles Breyer would settle claims from the US government, as well as a large number of plaintiffs, including owners, lessees and dealers.
VW agreed under the deal to buy back the emissions-cheating vehicles at their market price before the scandal broke late in 2015, at prices ranging from $12,475 for the 2009 Jetta Sedan to more than $44,000 for some 2015 Audi models. The owners also have the option of letting VW modify the cars to meet US pollution standards, if a fix is approved by environmental officials.
In either case, the owners would also get a cash settlement ranging from $5,100 to $10,000, depending on the vehicle.