Report: Volkswagen Settlement Over 3-Liter Vehicles Could Add $1B To “Dieselgate” Tab

Image courtesy of Thomas Hawk

Volkswagen has already agreed to pay $15 billion to settle a large portion of its “dieselgate” scandal, so what’s another $1 billion? That figure could reportedly be added to the carmaker’s tab as part of a settlement concerning so-called “defeat devices” on thousands of 3-liter vehicles not covered by the company’s earlier settlement with federal regulators. 

The Wall Street Journal, citing sources close to the matter, reports that VW is in talks with regulators to iron out a settlement involving about 87,000 3.0 liter diesel engine vehicles that would include additional compensation to owners and another buyback program.

A spokesperson for VW tells the WSJ that the “parties are making substantial progress toward a resolution for affected 3.0L TDI V6 vehicles,” but would not provide additional details, citing “confidentiality of the court.”

Sources say that the deal with the Environmental Protection Agency and the Department of Justice would likely involve VW buying back around 20,000 affected first-generation vehicles and fixing another 60,000 second-generation vehicles.

Like VW’s other affected vehicles, details of how the company actually plans to fix the cars has not been agreed upon by the EPA and California Air Resources Board.

CARB has previously rejected two proposed fixes from VW related to both 2-liter and 3-liter vehicles, saying the plans were “incomplete, substantially deficient, and fall far short of meeting the legal requirements to return these vehicles to the claimed certified configuration.”

Rumors of the impending settlement began on Friday, when a federal judge urged VW and the government regulators to complete a deal, setting a second hearing for today.

A rep for the Department of Justice tells the WSJ that the agency is “pleased with the progress made in settlement discussions and we’re optimistic for a resolution soon.”

While the expected settlement would close another chapter in VW’s dieselgate scandal, the company must still work out separate settlements with owners of 3-liter vehicles.

Still, the company has made some headway in putting the scandal behind it: in October, U.S. District Court Judge Charles Breyer finalized the proposed $15 billion settlement between the carmaker and federal regulators related to 2-liter vehicles.

Under that deal, VW would pay a maximum of $10.03 billion to cover buybacks and fixes for the affected vehicles, as well as $2.7 billion for environmental mitigation and another $2 billion for clean-emissions infrastructure.

Additionally, the company has agreed to pay dealers $1.2 billion over the deal and $600 million in a separate deal with state attorneys general.