Volkswagen's $18B TDI buyback would be largest consumer car action in US history

Volkswagen TDI 'clean diesel' television ad screencap

Volkswagen TDI ‘clean diesel’ television ad screencap

Enlarge Photo

Volkswagen on Tuesday announced a settlement with the EPA and numerous other regulators to resolve class-action lawsuits over its TDI diesel emission cheating scandal.

If approved next month, the deal would by by far the largest consumer action settlement in U.S. history. It comes nine months after the automaker admitted it lied about emissions levels in nearly half a million diesel cars sold in model years 2009 through 2015.

The roughly $15 billion settlement includes a provision up to $10 billion to buy back and scrap almost 470,000 cars in the U.S. fitted with various 2.0-liter diesel engines. A settlement hasn’t yet been announced for 85,000 cars sold with larger 3.0-liter V-6 diesel engines that also cheated on emissions.

In the landmark settlement, owners of affected VW and Audi models will receive “fair trade-in” value for their cars before the diesel scandal, defined by the National Automobile Dealers Association value as of September 2015, before the values declined due to the scandal.

Most owners will also qualify for a class-action settlement to drop claims against the automaker that it lied to owners about their “clean diesel” technology. Owners may be paid from $5,100 to $10,000 to drop their claims against Volkswagen.

The automaker said the settlement wasn’t a direct admission of guilt.

Roughly $2.7 billion has been set aside for fines and penalties to the U.S. Environmental Protection Agency, far below the theoretical penalty of $32,500 for each cheating car, which could have cost the automaker more than $15 billion.

“Today’s settlement restores clean air protections that Volkswagen so blatantly violated,” EPA Administrator Gina McCarthy said in a statement. “And it secures billions of dollars in investments to make our air and our auto industry even cleaner for generations of Americans to come. This agreement shows that EPA is committed to upholding standards to protect public health, enforce the law, and to find innovative ways to protect clean air.”

An additional $2 billion was allocated in the filing for clean-air technology and zero-emissions investment in states that use the tougher California Air Resources Board standards for emissions. The powerful CARB helped lead the fight against Volkswagen after it discovered the automaker’s diesel engines emitted up to 35 times more nitrogen oxides than the legal standard.

Source link