Feds Announce $15 Billion Settlement With VW Over Emissions Rigging

Image: Volkswagen emissions
A file picture dated October 8, 2015 shows a Volkswagen Touran with a 2.0l TDI type EA189 diesel engine, in Hanover, Germany.JULIAN STRATENSCHULTE / EPA file

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By Matthew DeLuca

Government lawyers announced a nearly $15 billion settlement with carmaker Volkswagen on Tuesday to partially resolve a U.S. investigation into emissions cheating on certain models of diesel vehicles.

The $14.7 billion deal will put aside money to buy back or fix rigged vehicles in the U.S., as well as provide additional compensation to owners. The company will also put $2.7 billion into a fund dedicated to alleviating the environmental toll caused by excess emissions. Another $2 billion will go toward advancing emissions reduction technology and infrastructure.

"By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our environment," Deputy Attorney General Sally Yates said at a news conference on Tuesday morning.

Read More: Can VW Buy Back Drivers' Trust After Diesel Scandal?

"Under these settlements, Volkswagen must do three things: the company must pay consumers to get these cars off the road; the company must fund pollution-reduction projects to offset the damage it caused; and the company must invest in projects that will encourage Americans to expand their use of zero-emissions vehicles in the future."

Volkswagen’s practice of emissions rigging came to light last September, after the Environmental Protection Agency said that the company had installed software on some of its models to help game testing systems. The company later came forward and said that the test-busting software had been installed on 11 million of its vehicles around the world.

“This historic agreement holds Volkswagen accountable for its betrayal of consumer trust, and requires Volkswagen to repair the environmental damage it caused,” said Elizabeth Cabraser, an attorney who helped hash out the agreement for consumers, in a statement on Tuesday.

Car buyers who purchased one of the 475,000 polluting Volkswagen vehicles in the U.S. will be able to have their cars repaired or bought back at the value it held before the scandal broke. The deal sets aside $10 billion for the buyback and repair program, and owners will also be eligible for between $5,000 and $10,000 under the agreement.

Drivers leasing one of the affected cars will be able to drop their lease without any fees or other penalties. Owners who don't want to sell their car back will have an option to get it fixed, but Volkswagen first has to get an emissions fix approved by the EPA and the California Air Resources Board.

A file picture dated October 8, 2015 shows a Volkswagen Touran with a 2.0l TDI type EA189 diesel engine, in Hanover, Germany.JULIAN STRATENSCHULTE / EPA file

Plaintiffs, the Department of Justice and the FTC filed documents on Tuesday detailing the agreement in the United States District Court for the Northern District of California.

The settlement requires approval from a judge before going into effect. Two websites — VWCourtSettlement.com and AudiCourtSettlement.com — have been launched for drivers to look up whether their vehicles are eligible if the settlement is approved.

Read More: VW Emissions Test Cheating More Widespread in Germany, Official Says

“We take our commitment to make things right very seriously and believe these agreements are a significant step forward,” Volkswagen chief executive Matthias Müller said in a press release. "We know that we still have a great deal of work to do to earn back the trust of the American people."

The cheating revelations and subsequent investigations have been a major blow for Volkswagen, with U.S. sales of the company’s vehicles dropping 13 percent from January through June of this year. The settlement does not address any potential criminal charges, federal lawyers said on Tuesday, and that part of the investigation is ongoing.

"We are aggressively pursuing the criminal investigation in this case, both of the companies involved and of the individuals," Yates said. "We're looking at multiple companies and multiple individuals."