Washington, DC - Volkswagen and US officials have apparently reached a framework deal under which the automaker will offer to buy back almost 500 000 diesel cars that used sophisticated software to evade US emission rules.
Volkswagen is expected to tell a federal judge in San Francisco on Thursday that it has agreed to offer to buy back as many as 500 000 two-litre diesel vehicles sold in the United States that exceeded legally allowable emission levels.
That would include versions of the Jetta, Golf and Audi A3 sold since 2009. The buyback offer does not apply to the 80 000 three-litre V6 diesels also found to have exceeded US pollution limits, including Audi and Porsche SUVs.
As part of the settlement with US authorities including the Environmental Protection Agency, Volkswagen has also agreed to a compensation fund for owners, which is expected to add more than $1 billion (R14.2 billion) on top of the cost of buying back the vehicles, but it’s not clear how much each owner might receive. VW may also offer to repair polluting diesel vehicles if US regulators approve the proposed fix.
Volkswagen will pay cash compensation to owners who either sell their vehicles back or get them fixed. Owners selling back their vehicles will get an additional cash payment on top of receiving the estimated value of the vehicles from before the emissions scandal became public in September 2015.
Owners are expected to have around two years to decide whether to sell back vehicles or get them repaired. It’s not clear whether VW will be allowed to resell vehicles they buy back.
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The framework deal with US officials was reached after lengthy talks in recent days at the Washington law office of Robert Mueller, the former FBI director who is the court appointed mediator named to help settle more than 500 civil suits filed against VW. The talks, which continued over the week, included all the government agencies and lead plaintiffs attorneys suing Volkswagen.
Some elements of the settlement are still being worked out and details are not expected to be announced on Thursday at the court hearing, as insiders say the final deal could still change before it is officially announced.
US District Judge Charles Breyer in March gave VW until Thursday “to announce a concrete proposal for getting the polluting vehicles off the road”.
Breyer said in March the “proposal may include a vehicle buy-back plan or a fix approved by the relevant regulators that allows the cars to remain on the road with certain modifications”.
A final settlement is also expected to include an environmental remediation fund to address excess pollution emitted by the US vehicles since 2009.
It’s not clear whether the deal will resolve the US Justice Department's civil suit filed in January against Volkswagen or whether the company will agree to pay a civil penalty. Volkswagen also faces ongoing criminal investigations by the Justice Department and other prosecutors around the world.
In December, Volkswagen said it was creating an independent claims program for owners of vehicles with excess emissions.
It named compensation expert Ken Feinberg, who administered funds for the September 11, 2001 attacks, the BP Deepwater Horizon oil spill and GM ignition switch crashes, to create and administer the program.
Reuters