VW settles diesel scandal in US for $14.7bn

The German automaker will buy back certain 2-litre vehicles and also pay owners an additional $5,100 to $10,000. (National Motor Museum/REX/Shutterstock)

HOUSTON (ICIS)–Volkswagen will pay over $10bn in the diesel-cheating scandal to buy back about 475,000 autos in the US as part of a total $14.7bn settlement announced on Tuesday by a US District Court in San Francisco.

The German automaker also agreed to compensate owners with an additional $5,100 to $10,000 depending on the age of their 2-litre diesel engine vehicles. The court settlement notes that VW could offer repairs.

As part of the settlement, VW is to pay $2.7bn to the government for environmental mitigation and spend $2bn on zero-emissions research. The company still faces billions more in penalties and possible criminal charges.

The emissions scandal first broke in September, when the company admitted that certain 2-litre VW and Audi branded diesel vehicles in the US were equipped with “defeat device” software designed to reduce the effectiveness of the vehicles’ emissions control systems, with respect to nitrogen oxides.

Some 11m vehicles were thought to be involved in the scandal worldwide, and in April, VW announced it had set aside $18.2bn to cover costs.

Owners, lessees and dealers filed hundreds of lawsuits against VW in federal courts across the US, which were then consolidated in the US District Court for the Northern District of California.

Tuesday’s settlement filings include a class action agreement to settle the claims of current and former owners and lessees of certain VW and Audi branded vehicles with the 2-litre engines.

The class action agreement does not apply to vehicles equipped with 3-litre engines, which are still the subject of continued litigation.

The Federal Trade Commission (FTC), the Department of Justice (DOJ), the Environmental Protection Agency (EPA) and California regulators were also involved in the settlement.

Following Tuesday’s filing deadline, the settlement will go before US District Judge Charles Breyer for preliminary approval on 26 July.

The case number is 3:15-md-02672-CRB.

INSET IMAGE: VW’s concept car at the New York International Auto Show on 23 March 2016. (Erik Pendzich/REX/Shutterstock)

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