US diesel emissions scandal results in Volkswagen making $15.3bn settlement

BY Fraser Tennant

In a settlement which it undoubtedly hopes will draw a substantial line under the matter, German carmaker Volkswagen AG has agreed to pay $15.3bn to settle the charge that it cheated on its diesel emissions tests in the US – a scandal which has rocked the automotive industry to its very core.

Volkswagen’s settlement agreement – reached this week in conjunction with the United States Department of Justice (DOJ), the State of California and the US Federal Trade Commission (FTC) – also resolves the civil claims regarding Volkswagen and Audi 2.0L TDI diesel engine vehicles in the US made by private plaintiffs (represented by the Plaintiffs’ Steering Committee (PSC)).

The diesel emissions scandal first became public in September 2015 when Volkswagen acknowledged that it had deliberately misled officials by installing secret software (the so-called ‘defeat device’) to circumvent US emissions tests (thus allowing US vehicles to emit up to 40 times the legal limit for safe levels of pollution).

Also part of the Volkswagen settlement is an agreement by the carmaker to buy back vehicles from affected consumers, as well as to provide funding that could profoundly benefit the creators of cleaner technologies (this includes a $2.7bn environmental remediation fund and the investment of $2bn to promote the use of zero emissions).

Furthermore, Volkswagen has also agreed with the attorneys general of 44 US states, the District of Columbia and Puerto Rico to resolve existing and potential state consumer protection claims in a settlement valued at approximately $603m.

“We take our commitment to make things right very seriously and believe these agreements are a significant step forward,” said Matthias Müller, chief executive officer of Volkswagen AG. “We appreciate the constructive engagement of all the parties, and are very grateful to our customers for their continued patience as the settlement approval process moves ahead.

“We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.”

Despite the settlement, the process represents only a partial resolution for Volkswagen, as the carmaker continues to face a criminal investigation which may result in company executives being held accountable for the wrongdoing related to its diesel emissions testing.

News: Volkswagen Agrees to $15 Billion Diesel-Cheating Settlement

©2001-2019 Financier Worldwide Ltd. All rights reserved.