Volkswagen’s Emissions Scandal Tab Just Grew By $86M

Image courtesy of Sarah

Last week, Volkswagen agreed to pay at least $15 billion to settle federal allegations that it used so-called “defeat devices” in nearly 500,000 diesel-engine vehicles in the U.S. to skirt emissions standards behind it. While the settlement is a first step for VW, the second step came this week when the carmaker agreed to pay an additional $86 million to settle similar charges in California. 

California Attorney General Kamala Harris’ office on Wednesday announced VW would pay $86 million in civil penalties as part of a second partial settlement over the company’s use of “defeat devices” to evade emissions testing in its diesel-engine vehicles.

The agreement [PDF], which is subject to court approval, resolves certain aspects of the AG’s claims against VW under the California’s Unfair Competition Law, as well as the Dodd-Frank Consumer Financial Protection Act of 2010.

The Attorney General’s office accused VW of deceiving regulators and consumers about that levels of harmful emissions emitted in its 2.0 and 3.0 liter vehicles that were later found to contain “defeat devices.”

“We must conserve and protect our environment for future generations and deliver swift and certain consequences to those who break the law and pollute our air,” AG Harris said in a statement.

The California agreement is part settlement of approximately $603 million with the 44 states that VW first announced last week, the carmaker said in a statement.

“Today’s filing formalizes the agreement with the California Attorney General announced last week to resolve consumer protection claims related to the diesel matter in California,” the company said. “Volkswagen continues to work hard to address other outstanding issues in the United States.“

Of the $86 million settlement, $76 million will go toward covering the costs of the AG’s investigation and litigation leading to the settlement and for the enforcement of consumer protection and environmental laws.

The remaining $10 million will be used by the AG’s office to provide grants to local government agencies or academic institutions to research and develop technology to detect “defeat devices” and better assess on-road emissions. The grants will also monitor, model, and mitigate the environmental and public health impacts of vehicle emissions, especially on children and other vulnerable populations.

As part of the settlement, VW is also prohibited from making false and deceptive advertising, must disclose the use of defeat devices to the California Air Resources Board, and provide the AG’s office with reports of any violations, along with periodic reports regarding its efforts to implement the injunction and effectiveness of those efforts.

The settlement with California comes a week after VW agreed to pay about $15 billion to begin the long process of putting the diesel scandal — which included vehicles that emitted 40 times the allowable rate of nitrogen oxide into the environment — behind it.

According to the 225-page settlement [PDF], VW will pay a maximum of $10.03 billion to cover buybacks and fixes for the affected vehicles, $2 billion to invest in green energy funds and $2.7 billion to offset diesel emissions.

The deal requires VW to buyback or fix affected diesel-engine vehicles, and provide additional compensation to owners.

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