Volkswagen is set to pay up a larger-than-expected amount to offer American customers buybacks for hundreds of thousands of diesel-powered cars involved in its emissions scandal.
Last week, VW’s settlement in the U.S. was estimated at $10.2 billion, already a staggering figure for automotive recalls. But on the eve of Tuesday’s announcement, a story from Reuters indicates the bill is now pegged at $14.7 billion. The total includes that $10.2 billion figure going to what appears to be the largest vehicle buyback program in the U.S. ever, as well as almost $5 billion to go towards offsetting the emissions for the diesel vehicles.
Owners are estimated to receive on average $5,000 per vehicle and the value of their vehicle before the scandal broke in September 2015, according to the report. Those who choose to have their vehicle fixed to comply with emissions standards will also be compensated for repairs, according to Reuters, but a fix isn’t part of the upcoming settlement and numerous attempts have been rejected by U.S. and California regulators.
This particular settlement will only affect the roughly half-million owners of 2.0-liter TDI-equipped cars such as the Jetta, Golf and Beetle and Audi A3 models sold between 2009 and 2015. Still to be figured out is how much VW will settle for with the roughly 85,000 people with the 3.0-liter TDI models in other VW, Audi and Porsche vehicles.
VW will likely pay additional fines to the federal government for violations to the Clean Air Act and may incur additional penalties if less than 85 percent of affected 2.0-liter TDI cars are not repaired or bought back by the company within four years, Reuters reported.
Values for VW’s TDI cars have plunged since the diesel scandal broke last year and it’s unknown how many buyers will take a buyout or hold on to their cars waiting for a fix. While Tuesday’s announcement is set to be a significant step in Dieselgate, it’s one of many before the matter moves to resolution.
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