Volkswagen, American owners of its diesel-equipped vehicles and government agencies have agreed on an enormous settlement to be compensated following the emissions cheating scandal revealed last year.
The terms of the settlement, which topped $15.3 billion, were released Tuesday by District Court Judge Charles Breyer, with the agreement reached between VW, the California Air Resources Board, Federal Trade Commission and owners who filed class action suits against VW.
As expected from previous reports, just over $10 billion will go to the estimated 475,000 Volkswagen and Audi cars from model years 2009 to 2015 equipped with a 2.0-liter TDI engine, such as the 2009-15 VW Jetta and Jetta SportWagen TDI; 2010-15 Golf and Golf Sportwagen TDI; 2012-15 Passat TDI and 2012-15 Beetle TDI and 2010-13 and 2015 Audi A3 TDI.
VW is also expected to pay a total of $603 million to 44 states, the District of Columbia and Puerto Rico to settle remaining consumer claims in those areas. The company agreed to put $2.7 billion over three years in a trust to compensate for excess NOx emissions from these TDI engines and $2 billion over 10 years for zero-emissions vehicle infrastructure, access and awareness, according to the court.
After the terms are finalized on July 26, VW can start contacting owners of the affected vehicles to find out whether they are interested in having their cars bought back by the company or a lease terminated. They will be offered the NADA Used Car Guide Clean Trade-in Value as of September 2015, when the scandal broke, adjusted for mileage and factory options, according to VW.
Owners who want to keep their cars can wait for a yet-to-be-determined fix to bring the TDI models under emissions regulations. But regulators have not been able to agree on a plan to modify the vehicles and it’s unknown how performance and economy might be affected, and it likely depends on model and year of the vehicle. VW has until mid-2019 under the settlement to buyback or fix all of the TDI models affected here.
In addition, VW must offer owners cash compensation as part of the agreement, of between $5,000 and $10,000.
Still to be resolved is the matter of VW, Audi and Porsche vehicles equipped with the 3.0-liter TDI engine, but VW said today the company, “continues to work expeditiously to reach an agreed resolution,” for those vehicles.
Matthias Müller, CEO of Volkswagen AG, released the following statement today:
“We take our commitment to make things right very seriously and believe these agreements are a significant step forward.” We appreciate the constructive engagement of all the parties, and are very grateful to our customers for their continued patience as the settlement approval process moves ahead. We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.”
How quickly TDI owners jump at the buybacks could be a test of how much trust VW has left among American consumers after this nearly year-long scandal.
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