VW offers cash or buyback as part of latest diesel settlement
In the most recent settlement over their emissions cheating scandal, Volkswagen says it will pay $1.2 billion to owners of their larger 3.0 liter diesel engine.
—As settlements continue, Volkswagen’s dieselgate scandal grows increasingly expensive for the German-based automaker.
In the latest and potentially last settlement, Volkswagen has agreed to spend more than $1.2 billion to fix or buy back nearly 80,000 vehicles that have its 3.0 liter diesel engine. As part of the arrangement, all of the relevant vehicle owners will also receive cash payments.
According to NPR, owners who intend to fix to their vehicles will receive between $7,000 and $16,000, plus an additional $500 should the updates diminish their car’s performance, while owners who opt for the buyback option will receive $7,500 on top of the vehicle's overall value.
While the numbers are currently estimated at $1.2 billion in total compensation, the fix has yet to be approved by US regulators. Should it not be accepted, Volkswagen will be forced to buy back all of the vehicles, bringing the cost up to around $4 billion.
The primary vehicles included in the latest settlement include the VW Touareg, the Audi Q7, and the Porsche Cayenne Diesel, all of which fall under the overarching Volkswagen corporate umbrella.
The proposals for dealing with these cars join the growing list of compensation arrangements the company has been forced to make since 2015 when the US Environmental Protection Agency discovered VW’s diesel engines contained emissions-test-cheating software.
Other payouts include $14.7 billion which included $10 billion to owners of 500,000 2.0 liter diesel engines, $1.2 billion in compensation to 652 franchise dealers in the US, $4.3 billion to settle civil and criminal allegations involving an additional 590,000 vehicles, and several billion more in environmental reparations, bringing the total amount to around $20 billion.
That number only represents payouts made by Volkswagen itself. In the recent settlement, auto supplier and automotive engineering company Bosch also agreed to pay $327.5 million to owners of the diesel engines based on allegations that it complied with Volkswagen in designing the device.
When it was first revealed that Volkswagen's diesel engines were designed to cheat United States emissions tests, the company's stock dropped 50 percent and analysts questioned whether the automotive giant would ever fully recover.
However, due to the lack of popularity of the diesel engines – only 20 percent of US buyers chose the diesel version compared to the 50 percent of European customers – the financial repercussions fell well below the initially predicted $70 billion immediately following the scandal, according to Forbes.
Now as the company nears the end of its settlements, share prices are up over 13 percent since December and only recently it was revealed that in 2016 Volkswagen surpassed Toyota in global sales volumes, selling 10.3 million vehicles and making the company the international sales leader.
“We continue to work to earn back the trust of all our stakeholders and thank our customers and dealers for their continued patience as this process moves forward,” said Hinrich Woebcken, Volkswagen’s US president, according to The Telegraph.