Update — June 28, 2016: Added financial details from Volkswagen
Volkswagen’s cost for settling U.S. accounts related to its diesel emissions scandal will be $14.73 billion USD, according to a Volkswagen AG press release published today.
That amount includes a $10.033 billion pool of cash that will go toward buying back the approximately 475,000 affected vehicles in the U.S. A further $2.7 billion will be paid into an environmental trust and another $2 billion will go toward establishing zero emissions vehicle infrastructure, access and awareness initiatives.
Car owners who opt for vehicles modifications to clean up their emissions (these have yet to be approved by the EPA) will get those updates free, and will receive a cash payment from VW. Reuters says owners of affected Volkswagen TDI diesel models will get an average of $5,000 in compensation on top of a buyback equal to the value of the vehicle before the EPA went public last September. It’s unclear whether that total amount includes monies to be paid to Canadian TDI owners, like Daniel Beaulieu. Volkswagen Canada has said that it will follow the final U.S. ruling, whatever that ends up being.
But today’s announcement doesn’t quite make things official. That will happen at a second court hearing on July 26 that will finalize the deal and, conceivably, kick off the process of compensating TDI owners affected by the scandal, which Reuters is calling the “largest ever vehicle buyback in U.S. history and the most expensive auto industry scandal.”
Note too that this amount only covers cars with VW’s 2.0 L four-cylinder diesel; VW and the EPA are still hashing out what to do about VW, Audi and Porsche models fitted with a 3.0 L diesel V6 also implicated in the emissions testing defeat controversy. No doubt buybacks and compensation related to that engine will further add to the automaker’s costs, which VW had initially estimated at about $18 billion USD.
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