Volkswagen AG to pay over $10 bn to settle diesel emissions claims
24 Jun 2016
Volkswagen AG would pay over $10 billion to settle claims by nearly 500,000 owners over the US diesel emissions cheating scandal and fund efforts to offset pollution, according to three sources briefed on the agreement, Reuters reported.
Speaking yesterday on condition of anonymity, due to court-imposed gag rules, a source said that owners would receive around $5,000 by way of compensation along with the estimated value of the vehicles as of September 2015, before the scandal erupted.
Owners would also receive the compensation if they chose to have the vehicles repaired, assuming US regulators approved a fix at a later date.
Under the settlements, Volkswagen would help boost zero emissions vehicles and introduce a programme to offset excess diesel pollution from the offending vehicles.
The settlement has been valued at $10.3 billion in documents outlining some of the complex settlements, the source added.
According to another source, that figure did not include part of the environmental costs, which would boost the overall settlement total.
Volkswagen disclosed in September that it had used sophisticated software to evade emissions requirements in nearly 11 million vehicles worldwide. The company also misled the EPA, which had started asking questions in 2014.
The payouts would go to 482,000 owners of US diesel vehicles which were installed software to skirt federal emission rules, according to Bloomberg News and the Associated Press, which cited unnamed sources.
Payments would reportedly range from $1,000 to $7,000, depending on the vehicle's age and other factors. Prices for used VW diesels had fallen 19 per cent since the scandal broke, according to Kelley Blue Book and it was expected that some cars could not be retrofitted to meet emission standards.
According to Jack Nerad, executive editorial director and market analyst at Kelly Blue Book, the settlement was ''immense and would likely involve a significant number of vehicle buy-backs.''
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