VW Diesel Settlement
German automaker Volkswagen is proving once again that cheating doesn’t pay.
Volkswagen captured a dominant share of the U.S. diesel car market from sales of its 2.0 TDI cars, touted as having an unbeatable package of performance, fuel economy, and low emissions. As it turned out, those VW diesels were too good to be true: the company announced in 2015 that it had used special software to cheat on emissions testing.
Instead of the clean emissions VW boasted, its TDIs in fact emit levels of nitrous oxide well above legal limits. VW’s shocking cheating admission spawned VW lawsuits and set the stage for costly dealings with regulators, dealers, and owners.
On October 25, 2016, a federal court approved the terms of a $15 billion settlement that VW hopes will make things right with U.S. TDI owners.
On December 20, 2016, VW announced it had also reached a $1 billion settlement with 3.0L diesel drivers affected by Dieselgate.
That same week, the company announced a settlement with Canadian drivers impacted by Dieselgate. This settlement will reimburse Canadian VW owners with between $5,100 and $8,000, depending on the make and model of their VW vehicle.
Finally, in January 2017, the German automaker reached a $4.3 billion agreement with the U.S. Department of Justice, which will cover criminal and civil charges stemming from the Dieselgate scandal. A judge approved that agreement in April 2017. Of that $4.3 billion, $2.8 billion will settle criminal charges and $1.5 billion will settle civil charges, mostly those filed by environmental regulators.
$15 Billion Settlement Terms
A funding pool worth a maximum of just over $10 billion will compensate approximately 475,000 eligible owners of 2.0L TDI cars. The pool will provide owners with:
- A one-time payment worth $12,500-44,000 per vehicle
- Vehicle buyback (or lease termination) OR free repairs to bring vehicle into emissions compliance
The settlement also includes $4.7 billion earmarked for an environmental remediation fund and initiatives to promote zero emissions vehicles (ZEVs) in the U.S. An additional $603 million will settle consumer protection claims with state attorney generals.
Customers now have the choice to “opt out” of the settlement and pursue a private compensation claim against Volkswagen (or continue to drive their vehicle as it is and do nothing).
The following 2.0L TDI vehicles are affected by Dieselgate:
- Jetta (2009-2015)
- Jetta Sportwagen (2009-2014)
- Beetle (2013-2015)
- Beetle Convertible (2013-2015)
- Audi A3 (2010-2015)
- Golf (2010-2015)
- Golf Sportwagen (2015)
- Passat (2012-2015)
The 3.0L TDIs involved in Dieselgate are not part of the $15 billion settlement. (Owners of these larger 6-cylinder diesel vehicles reached a $1 billion settlement two months later, in December 2016.)
VW Reaches $157M Settlement with Ten States
In March 2017, Volkswagen reached a $157.45 million settlement to resolve environmental charges in ten states, including Connecticut, Massachusetts, New York, Pennsylvania, and Washington.
This settlement brought the total cost of the Dieselgate scandal to roughly $25 billion.