A U.S. judge approved a $14.7bn settlement Volkswagen AG will pay in the country as a consequence of the company’s diesel emissions scandal. Owners of 475,000 diesel-powered vehicles with 2-liter engines can either sell back their cars to the German automaker or wait for a government-approved fix so their vehicles can stay on the road.
Under the final court approval, the company agreed to extra cash payments from $5,000 to $10,000 per person, depending on how old cars are. The world’s second-largest automaker will also spend $4.7bn in programs dedicated to clean energy projects, including the development of zero-emission ride-sharing fleets.
Volkswagen is also expected to fund projects focused on improving infrastructure for electric vehicles. Additionally, the automaker will invest $2.7 billion in infrastructure on Native American tribal land as part of its efforts to reduce diesel emissions.
Owners claimed the compensation should have been higher, but U.S. District Judge Charles Breyer turned down those objections by arguing that the deal was “adequate and fair”, as reported by the BBC. Kent Roberts, an attorney in Buffalo, N.Y., also said the court should have pushed for higher consumer compensations, according to the Wall Street Journal. Roberts is planning to sell back his 2013 Passat and believes the judge should have taken sales tax and other extra costs into account.
The agreement includes owners of Jettas, Golfs, Passats, Beetles, and Audi A3s dating back to the 2009 model, the Wall Street Journal reported. Elizabeth Cabraser, the lead lawyer for U.S. consumers, said most of the affected clients are willing to sell back their cars given that a wait for a government-approved fix could have a negative impact on vehicle performance.
It remains unclear how Volkswagen will compensate owners of 85,000 larger, 3-liter-engine diesel vehicles also included in the Dieselgate scandal. The company is set to update the court on that matter next week.
Cabraser also expressed she was pleased by the approval of an important settlement that holds the German company responsible for its illegal actions, which severely damaged its reputation.
Consumers have a year to decide whether they want to sell their cars back or wait for a fix. In case 85 percent of the affected units aren’t fixed or sold back by June 2019, Volkswagen would face penalties. Dealerships can now start buying back the vehicles.
Dieselgate
Volkswagen lost consumer trust after it installed software in diesel vehicles sold worldwide to cheat during emission tests. Regulators involved in the case found that some models could have been pumping out up to 40 times the allowed limit of nitrogen oxide, according to the BBC report. About 11 million vehicles distributed worldwide were affected.
The company admitted last year that it built devices designed to trick emission tests so the cars could spew high levels of pollutants without being discovered.
CEO of Volkswagen’s North American operations Hinrich Woebcken described Tuesday’s approval as “an important milestone in our journey to making things right in the United States,” as quoted by the Wall Street Journal. He added that the automaker was firmly decided to carrying out the program “as seamlessly as possible” for the consumers.
Source: Wall Street Journal