VW Offers Compensation for Diesel Emissions Scandal

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April 21, 2016 — Volkswagen (VW) has agreed to pay $5,000 to each affected customer in a settlement with regulatory agencies for cheating diesel emissions tests in the United States.

Reuters reports that unidentified sources close to the negotiations disclosed terms of the proposed settlement in the German newspaper Die Welt. However, others said that no decisions had been made on the amount of individual compensation.

Volkswagen has also offered to buy back almost 500,000 2.0-liter TDI “Clean Diesel” cars that were sold with sophisticated software to cheat emissions. In the future, the company will offer to fix the vehicles if they can work out an acceptable repair with U.S. regulatory agencies.

The company will pay cash compensation to owners who fix the vehicles or sell them back. Owners will have about two years to decide whether to sell back their vehicle or get it repaired.

The settlement was presented today to Judge Charles R. Breyer in the U.S. District Court in San Francisco, avoiding trial that was scheduled to begin this summer. He said owners will receive “substantial compensation” and that the agreement “will fully address any excess emissions and environmental consequences,” according to the New York Times.

The so-called “defeat device” could sense when the vehicle was being tested for emissions and temporarily reduce pollution to meet legal limits. On the road, the cars emitted up to 40X the acceptable level of nitrogen oxides, a toxic pollutant that causes respiratory problems.

Volkswagen is still facing massive fines for violating the Clean Air Act, as well as criminal investigations and lawsuits for false advertising. The company is still in negotiations as to how much money it will pay in fines. The Environmental Protection Agency (EPA) says the fines could be as high as $18 billion, but legal experts expect it to be much lower.

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