VW, EPA to Continue Work on Fix for Remaining Diesel Cheats

  • Company to return to court Aug. 25 over 3.0-liter engine cars
  • VW reached $15.3 billion deal for 2.0-liter engines this week

Volkswagen AG and U.S. regulators told a federal judge considering this week’s milestone deal covering a half-million diesel emissions-cheating cars that they will need months to review a possible fix for 85,000 more vehicles with larger engines.

U.S. District Judge Charles Breyer in San Francisco told lawyers for the company and the U.S. Environmental Protection Agency to return to court on Aug. 25 to report again on efforts to devise a fix for the 3.0-liter engines not covered by this week’s agreement. Those cars include the 2014 Volkswagen Toureg, 2015 Porsche Cayenne and 2016 Audi Q5.

Finding an acceptable fix for the 3.0-liter models or getting them off the road is one more obstacle in VW’s path to recovery after admitting in September to rigging 11 million vehicles worldwide from 2009 to 2016 to cheat on emissions tests. On Tuesday, lawyers for car owners in the U.S., along with the company and federal and state officials, announced a $15.3 billion plan to buy back or fix 480,000 vehicles with 2.0-liter diesel engines.

Car owners will have the option of selling their vehicles back to VW or accepting a fix if one is approved by the EPA. In either case, owners will get $5,100 to $10,000 each in additional compensation. Some leaseholders will receive about half those amounts.

The settlement with the U.S. government requires VW to get 85 percent of the cars recalled by June 30, 2019. If it fails to meet that target, it will have to pay more into the environmental mitigation trust.

Breyer reminded lawyers Thursday that he hasn’t approved that settlement yet.

VW still faces lawsuits by at least six states plus investors and dealerships in the U.S., as well as parallel lawsuits, including consumer complaints, in Germany, all of which could raise the scandal’s price tag for the automaker. Future expenses may also include hundreds of millions of dollars in fees for the lawyers who secured Tuesday’s deal for car owners. More penalties, along with further damage to VW’s reputation, may yet spring from criminal probes in the U.S., Germany and South Korea.

With additional fees and penalties likely, VW may need to devote more than the 16.2 billion euros ($18 billion) it has set aside to cover the cost of repairs, fines and legal fees. On Tuesday, the company said the settlement was within the scope of the provisions it has already made and repeated that its assessment of financial risk might be revised.

The case is In Re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, MDL 2672, U.S. District Court, Northern District of California (San Francisco).

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