German automaker Volkswagen AG will pay as much as $15.3 billion after admitting it cheated on U.S. diesel emissions tests for years, agreeing to buy back vehicles from consumers. It had installed a secret software that allowed it to have 40 times more pollution levels from their cars than allowed. Volkswagen (VW) also agreed to put up $2.7 billion over three years that government and tribal agencies would use to replace old buses or to fund new infrastructure at ports to reduce diesel emissions.
The settlement covers 4.75 lakh 2 litre diesel Jetta, Beetle, Audi A3, Golf, and Passat vehicles from the 2009-2015 model years. Volkswagon also announced a separate settlement with at least 44 U.S. states, the District of Columbia and Puerto Rico that will cost at least $600 million, bringing the total to as much as $15.3 billion.
VW is also barred from making deceptive claims in the future, according to a settlement with the U.S. Federal Trade Commission. The actual amount VW will spend on buybacks could be significantly less if regulators approve fixes and owners opt to get vehicles repaired. Most owners will get $5,100 to $10,000 in compensation, including the pre-scandal value of the cars, filed documents said.
The company expects to begin buying back vehicles in October. VW cannot resell or export the vehicles it buys back unless the EPA approves a fix, the documents said. Volkswagen must repair or buy back 85 percent of the 4.75 lakh vehicles by June 2019 or face penalties of $100 million for every percentage point it falls below that figure.
The agreement does not lift a ban placed in September on sales of the company's diesel vehicles in US.
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