Volkswagen reaches deal on final cars in emissions scandal

SAN FRANCISCO - Volkswagen reached a deal with U.S. regulators and attorneys for car owners for the remaining 80,000 diesel vehicles caught in the company’s emissions cheating scandal, a federal judge announced Tuesday.

U.S. District Judge Charles Breyer in San Francisco said the settlement for the 3-liter diesel cars will include the option of a buyback for at least 20,000 vehicles and will give all owners substantial compensation on top of any repairs or a buyback.

Breyer did not disclose any numbers and said the parties still have more work to do. It comes after a series of delays this week to give the sides more time to negotiate.

Volkswagen previously reached a deal for the other 475,000 polluting vehicles in the scandal. That deal gives owners of those 2-liter diesel cars the option to have the German automaker buy back their vehicle regardless of its condition for the full trade-in price on Sept. 18, 2015, when the scandal broke, or pay for repairs.

Volkswagen also will pay the 2-liter diesel owners $5,100 to $10,000 each, depending on the age of the car and whether the owner had it prior to Sept. 18 of last year.

The company has agreed to spend up to $10 billion compensating those consumers. That settlement also includes $2.7 billion for unspecified environmental mitigation and $2 billion to promote zero-emissions vehicles.

“We are pleased to be moving forward on an agreement in principle to compensate consumers who purchased affected Volkswagen and Audi 3.0 liter vehicles and look forward to resolving the final details,” Federal Trade Commission Chairwoman Edith Ramirez said in a statement. “The FTC, with its partners, secured $10 billion in compensation for the vast majority of consumers harmed by Volkswagen’s deceptive advertising earlier this year, and today’s agreement will provide redress for a smaller but no less important group of consumers who were not part of the original settlement.”    

The global scandal erupted last year when the U.S. Environmental Protection Agency said Volkswagen had fitted many of its cars with software to fool emissions tests. Car owners and the U.S. Department of Justice sued.

“EPA has a public health imperative to hold Volkswagen accountable and remedy the illegal pollution their cars put into the air,” said Cynthia Giles, EPA’s Assistant Administrator for Enforcement and Compliance Assurance, in a statement following the announcement of the latest agreement with VW.

The software recognized when the cars were being tested on a treadmill and turned on pollution controls. The controls were turned off when the cars returned to the road. The EPA alleged the scheme let the cars spew up to 40 times the allowable limit of nitrogen oxide, which can cause respiratory problems in humans.

The scandal has damaged Volkswagen’s reputation and hurt its sales. The company has reached a separate $1.2 billion deal with its U.S. dealers and is still facing potentially billions more in fines and penalties and possible criminal charges.