VW Reaches Record $14.7 Billion Settlement In Dieselgate Cases
car&bike Team
1 min read
Oct 26, 2016, 02:49 AM
Key Highlights
- The settlement is for regulators and owners of 475,000 diesel vehicles
- $10.033 billion will be spent on buybacks and owner compensation
- $4.7 billion will be spent to offset excess emissions
A U.S. federal judge on Tuesday approved Volkswagen AG's record-setting $14.7 billion settlement with regulators and owners of 475,000 polluting diesel vehicles, and the German automaker said it would begin buying back the vehicles in mid-November.
The action by U.S. District Judge Charles Breyer in San Francisco marked the latest development in a scandal that has rocked VW since it admitted in September 2015 using secret software in its diesel cars to cheat exhaust emissions tests and make them appear cleaner than they really were.
Under the settlement first announced in June, Volkswagen agreed to spend up to $10.033 billion on the buybacks and owner compensation and $4.7 billion on programs to offset excess emissions and boost zero-emission vehicle infrastructure and other clean vehicle projects.
The affected vehicles emit up to 40 times legally allowable pollution levels. Volkswagen may also be allowed to repair vehicles if regulators approve fixes. It represented the largest civil settlement worldwide ever reached with an automaker over allegations of misconduct and fraud toward vehicle owners.
In total, Volkswagen has agreed to date to spend up to $16.5 billion in connection with the diesel emissions scandal, including payments to dealers, states and attorneys for owners. The scandal rattled VW's global business, harmed its reputation and prompted the ouster of its CEO.
The world's second-largest automaker still faces billions more in costs to address 85,000 polluting 3.0 liter vehicles and U.S. Justice Department fines for violating clean air laws. It also faces lawsuits from at least 16 U.S. states for additional claims that could hike the company's overall costs.
Breyer turned away objections from owners who thought the settlement did not provide enough money, saying the agreement "adequately and fairly compensates" owners. In addition to the pre-scandal "trade in" value of the vehicle, owners will also receive $5,100 to $10,000 in additional compensation. "Given the risks of prolonged litigation, the immediate settlement of this matter is far preferable," Breyer wrote.
Volkswagen agreed to make up to $1.21 billion in payments to 652 U.S. VW brand dealers and $600 million to 44 U.S. states to address some state claims. To date, nearly 340,000 owners have registered to take part in the settlement, and only about 3,500 owners have opted out. Volkswagen must fix or buy back 85 percent of the 475,000 vehicles under the agreement within two years or face additional costs.
Under the Justice Department agreement, VW will provide $2 billion over 10 years to fund programs to promote construction of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum. VW also agreed to put up $2.7 billion over three years to enable government agencies and agencies on Native American tribal lands to replace old buses or to fund infrastructure to reduce diesel emissions and award states about $600 million.
Volkswagen spokeswoman Jeannine Ginivan said the automaker expects to begin buying back vehicles in mid-November. The automaker has hired 900 people, including one to be stationed at each dealership, to handle buybacks.
The action by U.S. District Judge Charles Breyer in San Francisco marked the latest development in a scandal that has rocked VW since it admitted in September 2015 using secret software in its diesel cars to cheat exhaust emissions tests and make them appear cleaner than they really were.
Under the settlement first announced in June, Volkswagen agreed to spend up to $10.033 billion on the buybacks and owner compensation and $4.7 billion on programs to offset excess emissions and boost zero-emission vehicle infrastructure and other clean vehicle projects.
The affected vehicles emit up to 40 times legally allowable pollution levels. Volkswagen may also be allowed to repair vehicles if regulators approve fixes. It represented the largest civil settlement worldwide ever reached with an automaker over allegations of misconduct and fraud toward vehicle owners.
In total, Volkswagen has agreed to date to spend up to $16.5 billion in connection with the diesel emissions scandal, including payments to dealers, states and attorneys for owners. The scandal rattled VW's global business, harmed its reputation and prompted the ouster of its CEO.
The world's second-largest automaker still faces billions more in costs to address 85,000 polluting 3.0 liter vehicles and U.S. Justice Department fines for violating clean air laws. It also faces lawsuits from at least 16 U.S. states for additional claims that could hike the company's overall costs.
Breyer turned away objections from owners who thought the settlement did not provide enough money, saying the agreement "adequately and fairly compensates" owners. In addition to the pre-scandal "trade in" value of the vehicle, owners will also receive $5,100 to $10,000 in additional compensation. "Given the risks of prolonged litigation, the immediate settlement of this matter is far preferable," Breyer wrote.
Volkswagen agreed to make up to $1.21 billion in payments to 652 U.S. VW brand dealers and $600 million to 44 U.S. states to address some state claims. To date, nearly 340,000 owners have registered to take part in the settlement, and only about 3,500 owners have opted out. Volkswagen must fix or buy back 85 percent of the 475,000 vehicles under the agreement within two years or face additional costs.
Under the Justice Department agreement, VW will provide $2 billion over 10 years to fund programs to promote construction of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum. VW also agreed to put up $2.7 billion over three years to enable government agencies and agencies on Native American tribal lands to replace old buses or to fund infrastructure to reduce diesel emissions and award states about $600 million.
Volkswagen spokeswoman Jeannine Ginivan said the automaker expects to begin buying back vehicles in mid-November. The automaker has hired 900 people, including one to be stationed at each dealership, to handle buybacks.
© Thomson Reuters 2016
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Related News
Popular Volkswagen Models
Latest Cars
Upcoming Cars
Trending News
1 min readTriumph Tracker 400: In Pictures
Latest News
car&bike Team | Dec 18, 2025KTM 160 Duke With TFT Dash launched At Rs 1.79 LakhThe 5-inch colour TFT dash is borrowed from the 390 Duke and is shared across the brand’s sub-400cc lineup.2 mins read
car&bike Team | Dec 18, 2025Lamborghini Urus Seized By Cops Following Viral Clip Of Speeding On Bandra-Worli Sea LinkThe car was seized after a video of it allegedly overspeeding on the Bandra–Worli Sea Link, where the speed limit is capped at 80 kmph, went viral.2 mins read
car&bike Team | Dec 18, 20252025 Ducati XDiavel V4 India Launch Details RevealedThe new Ducati XDiavel V4 will be launched towards the end of December 2025 and will sit alongside the standard Ducati Diavel V4.3 mins read
Amaan Ahmed | Dec 18, 2025Maruti WagonR Swivel Front Seat Kit Launched: Check Price, AvailabilityBangalore-based startup TrueAssist Technology Private Limited has developed a mechanism that allows the front passenger seat to swivel outwards, in a bid to improve accessibility for the aged and persons with disabilities.2 mins read
Amaan Ahmed | Dec 18, 2025Nissan Gravite MPV (Renault Triber Derivative) To Be Launched Early In 2026Nearly seven years on from the launch of the MPV it shares its underpinnings with arrives Nissan's entry-level 7-seat model; to debut in January.2 mins read
Jafar Rizvi | Dec 18, 2025Tata Sierra Pure, Pure+ Variants Explained In PicturesThe Pure trim of the Sierra is priced from Rs 12.49 lakh to Rs 17.49 lakh (ex-showroom), depending on the powertrain option. Here is a breakdown of what it gets.3 mins read
Bilal Firfiray | Dec 18, 2025Mercedes-Benz G450d: The Subtle Power of EvolutionThe Mercedes-Benz G 450d evolves subtly with more power, improved efficiency, and modern tech, while staying true to the timeless G-Class design. And character.4 mins read
Janak Sorap | Dec 11, 2025Harley-Davidson X440 T First Ride Review: Smarter and SharperHarley-Davidson has taken the X440 and given it a more focused and engaging twist. The result is the X440 T—essentially the same platform but updated in areas that give the motorcycle more appeal and riders more thrill.5 mins read
Shams Raza Naqvi | Dec 10, 20252025 Mini Cooper Convertible Review: More Colour On Indian RoadsThe updated Mini Cooper Convertible is set to be launched in the Indian market in the next few days. We drive it around Jaisalmer for a quick review.1 min read
Bilal Firfiray | Dec 8, 2025Tata Sierra Review: India’s New Favourite?Marking its return after a few decades, the reborn Sierra has made everyone sit up and take notice. But is it worth the hype?10 mins read
Girish Karkera | Dec 4, 20252026 Honda Prelude First Drive: Domesticated Civic Type RA sporty-looking coupe built to give customers a taste of performance but not at the expense of everyday practicality.5 mins read