Volkswagen will pay $14.7 billion to settle claims over its diesel cars with 2-liter diesel engines, including plans for buybacks and payments up to $10,000 for each vehicle to owners.
The deal is expected to include $10 billion to repair or buy back 475,000 cars equipped with the diesel engines, which it admits it rigged to pass emissions tests. The agreement would cover actions by the U.S.
Environmental Protection Agency and California's Air Resources Board and is expected to be filed in court Tuesday. The case still must be approved by a judge.
In addition, the deal requires Volkswagen to pay $2.7 billion in fines and devotes another $2 billion on clean-emissions technology, sources tell the Associated Press, Bloomberg News and New York Times.
Owners will receive $5,100 to $10,000 in compensation and can either have their cars fixed or bought back to be repaired to bring them in compliance, it was reported. If owners elect to have their cars bought back, their value would be set to last September when the scandal broke. The date is important because the vehicles have lost value due to the scandal.
The deal is expected to be the costliest case of its kind ever for an automaker. And the pain isn't over: Other investigations and suits are underway that could drive the German automakers' costs even higher. At nearly $15 billion, the settlement would come close to the $18.2 billion that VW took as a charge against earnings in 2015 to cover costs of the debacle.
Also left unsolved is what's going to happen with Volkswagen vehicles with 3-liter diesel engines, which were also cited by the EPA as being in violation of pollution limits.
In the case of 2-liter engines, VW inserted software into their pollution control systems that detected when they were being tested. On the test equipment, the cars were in compliance. On the highway, they spewed up to
40 times the pollutants allowed. Besides regulators, customers were left in the dark as well. The vehicles were sold as "clean diesels."
Volkswagen hasn't released details of its internal investigation that would pinpoint individuals behind the deception.
