Photographer: Krisztian Bocsi/Bloomberg

Volkswagen Says It Has EPA Approval to Sell Repaired Diesels

Updated on
  • Sales of 2015 model diesels can begin after software update
  • Diesel still unlikely to play major future role in U.S. for VW

Volkswagen AG will soon do what’s been impossible since its emissions crisis began: sell diesel-powered cars in the U.S.

The company received approval from the Environmental Protection Agency for its dealers to sell 2015 model year diesels after updating the vehicles’ emissions software, VW Group of America spokeswoman Jeannine Ginivan said.

The software update is part of a required emissions repair approved by the EPA and California Air Resources Board. The repair will also include changes to diesel engine hardware, but dealers do not have to wait until the repair parts become available early next year, Ginivan said.

"We are still finalizing the details of this program and will provide more information on its implementation at the appropriate time,” Ginivan said in a statement.

Volkswagen admitted 18 months ago to rigging nearly 500,000 diesel cars to pass U.S. emissions tests. The Wolfsburg, Germany based company froze sales of new and certified used diesels in the U.S. while it worked with regulators on an approved fix. The company has put aside $24 billion (22.6 billion euros) to cover costs and fines related to the scandal.

The shares were little changed at 136.50 euros at 9:19 a.m. in Frankfurt trading, bringing the decline since the scandal broke in September 2015 to about 16 percent.

Significant Milestone

Reviving diesel sales marks a significant milestone in VW’s efforts to recover from the scandal and rebuild its relationship with environmental regulators. It also returns a key product to dealer showrooms that attracted a cult-like customer base and accounted for about 20 percent of the VW brand’s pre-scandal sales.

Yet it’s a mostly symbolic step. The sales approval only applies to about 67,000 diesels from the 2015 model, about 12,000 of which are currently in dealer inventory, Ginivan said. 

An EPA spokeswoman didn’t immediately return messages seeking comment.

Volkswagen has also said no new diesel models will be offered in the U.S. at least through model year 2018. The company is moving aggressively toward electric vehicles, signaling a diminishing role for diesel engines in the company’s portfolio, especially in the U.S.

The program will also eventually include used 2015 diesels the company has repurchased from owners through the 2016 settlement with U.S. regulators and owners, Ginivan said. Some customers have elected to keep their cars and receive restitution and an emissions repair under the terms of its $10 billion buyback.

While diesel engines are more fuel efficient than their gasoline counterparts and are found in about half of new passenger cars sold in Europe in part due to tax breaks, they never fully caught on in the U.S., accounting for less than three percent of deliveries.

— With assistance by Claudia Carpenter

(Update with shares in sixth paragraph.)
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