Volkswagen AG will buy back about 500,000 diesel vehicles which were part of the emissions scandal that rocked the German automaker last year when it became known the vehicles used illegal software to cheat U.S. emissions law.
The new buyback program for applicable diesel vehicles includes versions of the VW Jetta and Golf, as well as the Audi A3, from 2009 through today—specifically the 2.0L diesel models. It will not include the 3.0L diesel vehicles also found to have exceeded U.S. pollution limits, including Audi and Porsche SUVs, according to Reuters, which was first to report the story.
“It is not clear if the deal will resolve the U.S. Justice Department’s civil suit filed in January against VW or if VW will agree to pay a civil penalty,” the Reuters story said. “VW also faces ongoing criminal investigations by the Justice Department and other prosecutors around the world.
“Separately, Germany’s Die Welt newspaper reported Wednesday that the deal to settle the case would involve it paying each affected customer $5,000. But a person briefed on the matter told Reuters that no decisions on how individual compensation will be awarded have been made.”
In September 2015, Volkswagen admitted to rigging 482,000 cars with illegal software designed to cheat emissions testing. About 2.8 million diesel vehicles in Germany were affected. Volkswagen diesel cars were actually polluting up to 40 times the government-mandated threshold in real-world driving conditions in the United States and Europe.
The U.S. Environmental Protection Agency kicked off a global firestorm for Volkswagen and the auto industry with its public announcement that the world’s largest automaker had intentionally and systematically installed software designed to cheat emissions testing.
The fallout has been enormous. Volkswagen lost a third of its value (more than $22 billion) in less than a week, and is facing untold fines and litigation in the United States, and perhaps from many countries. At least 11 million Volkswagen vehicles have the illegal software installed, the company admitted.
In the U.S. alone, Volkswagen could theoretically be fined $18 billion for violating the Clean Air Act, though industry watchers speculate the fines aren’t likely to reach that level given the precedent set by the government’s handling of recent fines for General Motors and Toyota. GM settled with the Department of Justice for $900 million even though 124 deaths were directly linked to faulty ignition switches GM engineers knew about. Toyota settled for $1.2 billion after some Toyota cars were found to have both sticky gas pedals and a vulnerability to gas pedal entrapment with certain floor mats.