VW gets US court approval for ‘diesel-gate’ settlement

Stefan Baumgarten

25-Oct-2016

HOUSTON (ICIS)–German car major Volkswagen said on Tuesday that the US District Court for the Northern District of California granted final approval to a settlement agreement between VW and private plaintiffs related to the company’s diesel emissions scandal.

The settlement resolves civil claims regarding eligible VW and Audi 2.0L TDI vehicles in the US. It does not include 3-litre diesel cars that were also affected by the scandal.

VW did not comment on the total amount of the settlement. According to earlier reports, the settlement will cost VW around $15bn.

Under the terms of the 2.0L TDI settlement, affected owners and lessees will be able to choose whether to accept a buyback or lease termination, or receive an approved emissions modification for their vehicle. VW will also make cash payments to affected current and certain former owners and lessees, it said.

VW added that it agreed to pay $2.7bn over three years into an environmental trust, managed by a trustee appointed by the court, to remediate excess nitrogen oxide (NOX) emissions from 2.0L TDI vehicles in the US. In addition, the company will invest $2.0bn over 10 years in zero emissions vehicle (ZEV) infrastructure, access and awareness initiatives, it said.

“Final approval of the 2.0L TDI settlement is an important milestone in our journey to making things right in the US, and we appreciate the efforts of all parties involved in this process,” said Hinrich Woebcken, president and CEO of Volkswagen Group of America.

The scandal broke in September 2015 when the company admitted that about 11m of its diesel cars worldwide were equipped with “defeat software”, enabling them to pass emissions tests.

The automotive industry is a major global consumer of petrochemicals which contributes more than a third of the raw material costs of an average vehicle. ICIS tracks the movement of petrochemical raw material costs in auto production both globally and regionally with the weighted ICIS Basket of Automotive Petrochemicals (IBAP).

ICIS produces a monthly Global Automotive report covering the major automotive chemicals markets, the auto-industry, the IBAPs and macroeconomic trends. For more information on the report and details on how to subscribe, please
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