Volkswagen Settles Diesel Emissions Violations for $14.7 Billion

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Source: Car and Driver
Full Article: Volkswagen Settles Diesel Emissions Violations for .7 Billion, Even More Fines to Come

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Volkswagen will pay $14.7 billion to settle with three federal agencies suing the automaker for its excessive diesel emissions, the highest ever paid by a company for violations under the Clean Air Act.

The Environmental Protection Agency, the Federal Trade Commission, and the Department of Justice announced the partial settlement with no lack of joy for the influx of new federal funding, with EPA administrator Gina McCarthy (pictured below) admitting the money will cut nitrogen-oxide emissions in “ways that current budgets could never have realized.” A total of $10 billion will cover costs to buy back all 475,000 Volkswagen TDI models with 2.0-liter engines. A total of about 460,000 Volkswagen and 15,000 Audi models are still registered on the road out of the 499,000 cars originally cited by the EPA.

Owners of these specific 2009–2015 models will receive the “fair replacement value” of their cars as of September 17, 2015, the day before the company’s scandal went public. The values will range between $12,500 and $44,000, depending on model, age, trim, and region, according to FTC chairwoman Edith Ramirez. Leases can be terminated early with no penalty. Volkswagen can’t resell or export the cars without first performing a repair approved by the EPA and the California Air Resources Board, which the automaker also must offer to owners for free. Anyone who only elects the emissions fix—which may not even be possible, according to McCarthy—will receive between $5100 and $10,000 to compensate for diminished resale value. All 2.0-liter TDI owners will have up to May 2018 to decide. It’s important to note that Volkswagen owners are still under no obligation to stop driving or sell their vehicles unless state emissions requirements prevent them from renewing their registrations.


Speaking to reporters, EPA administrator Gina McCarthy said she was “incredibly proud” of the settlement.

Another $2.7 billion will fund future state-level projects that reduce nitrogen-oxide emissions under the EPA’s Diesel Emissions Reduction Act, which are federal grants marked to replace old diesel engines and for retrofit kits for alternative-fuel powertrains and other similar vehicle hardware. Volkswagen must buy back 85 percent of all cars by June 2019, or else it must pay even more to fund such projects. The automaker also must spend $2 billion over the next 10 years to invest in green energy and electric cars, including paying for new public charging stations and public-education programs.

The settlement is considered “partial” since it does not address Volkswagen’s potential criminal liability, additional civil penalties levied by various states, or anything related to the 85,000 Porsche, Audi, and Volkswagen models with the 3.0-liter diesel engine. These additional penalties and settlements could total several billion dollars.

Pictured at top: Volkswagen CEO Matthias Müller 

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