Volkswagen Group’s dieselgate saga continues, but it appears the German company would be able to get out of trouble, but it would not be unscathed. This development comes as Volkswagen entered into an agreement with the United States Department of Justice (DOJ) and regulatory agencies to compensate customers whose vehicles are powered by the group’s 3.0-liter TDI diesel engines implicated in the emissions cheating scandal in 2015.
The new settlement agreement covers 83,000 Volkswagen Group vehicles powered by the group’s 3.0-liter TDI V6 engines that have been found to have employed software that helps them evade the emissions testing process. No thanks to this software, these V6 diesel engines seem cleaner than they actually are. Parties in the agreement – coming in the form of a proposed Consent Decree – include Volkswagen AG, Volkswagen Group of America, US DOJ, the Environmental Protection Agency (EPA), the State of California, the California Air Resources Board (CARB) and the California Attorney General. The latest settlement agreement is more or less similar to the one that covers Volkswagen’s 2.0-liter TDI engines.
Under the proposed Consent Decree, Volkswagen has agreed to recall and/or buy back the affected 3.0-liter TDI V6 vehicles from Volkswagen, Audi and Porsche brands. The program will be separated into two parts.
First, Volkswagen would recall around 63,000 vehicles sold or leased by Volkswagen, Audi and Porsche powered by the so-called Generation 2 of the 3.0-liter TDI V6 engine. These diesel vehicles include VW Toureg (model years 2013 to 2016), Audi Q7 (MY 2013 to 2015), Porsche Cayenne (MY 2013 to 2016), and Audi A6 Quattro, A7 Quattro, A8, A8L, and Q5 (MY 2014 to 2016). The recall is proposed in order to appropriately modify these Gen 2 diesel models – as approved by EPA and CARB – and make them have the same emission levels as in their certifications. Should such modifications fail to happen, Volkswagen would buy back or terminate the lease of these Gen 2 diesel models.
Second, Volkswagen would buy back or terminate the leases of around 20,000 vehicles from the VW and Audi brands powered by the so-called Generation 1 of the 3.0-liter TDI V6 engine. These diesel vehicles include the VW Touareg and Audi Q7 (MY 2009 to 2012). A buy back or lease termination is proposed simply because these Gen 1 diesel models cannot be modified by Volkswagen back to their EPA-certified emissions levels.
As part of the agreement, Volkswagen would deposit $225 million into an environmental remediation trust that would be used to pay for the settlement program. Moreover, Volkswagen will pay around $25 million to CARB.
The proposed settlement agreement is still subject to the approval of Judge Charles R. Breyer of the United States District Court for the Northern District of California. The parties are required to submit a formal agreement to the court on or before January 31, 2017.