Volkswagen, U.S. Reach Deal in ‘Dieselgate’ Scandal

Angry consumers may soon be saying goodbye to their pollution-heavy Volkswagens. The United States Department of Justice and German automaker Volkswagen have potentially settled on an emission-reducing deal.

Last year, the “Dieselgate” scandal made headlines when the Environmental Protection Agency revealed that VW had been cheating on its emission tests; the CEO of the company stepped down and VW has been attempting to compensate—and regain the trust of—consumers ever since. While the specifics of the deal are not fully known, Reuters reports:

U.S. Judge Charles Breyer said the settlement is expected to include a buyback offer for 482,000 2.0-liter vehicles and a possible fix if regulators agree on it, or the cancellation of an outstanding lease.

Two people briefed on the matter and several analysts say VW may have to spend more than $10 billion to comply with the U.S. agreement. …

The U.S. settlement will include an environmental remediation fund to address excess emissions and additional “substantial compensation” to owners to sell back or have their vehicles fixed, Breyer said.

The deal is expected to settle more than 600 class action civil suits filed in U.S. courts.

CBS News adds that VW potentially avoids a trial thanks to this agreement, and that Breyer has set June 21 as the deadline for additional details to be worked out.

But it may still be too early for environmental advocates to break out the champagne. “[I]t’s worth noting that further delay means that these polluting cars remain on the road—emitting up to 40 times the allowable level of pollution—for even longer,” said Mike Litt, consumer program advocate for the U.S. Public Interest Research Group Education Fund, which launched a “Make VW Pay” campaign following the Dieselgate scandal.

New York Attorney General Eric Schneiderman also noted that this deal does not resolve claims made by states:

The multistate coalition—led by New York and the states of Connecticut, Massachusetts, Oregon, Tennessee, and Washington—continues to vigorously investigate Volkswagen’s misconduct, and will aggressively pursue the recovery of substantial penalties and other appropriate relief.

Rebecca Lindland, a senior analyst for Kelley Blue Book, a vehicle valuation and automotive research company, notes that the “matter is by no means resolved, since penalties and fines still loom.” Additionally, according to Volkswagen’s website, the deal has “no legal bearing on proceedings outside of the United States.”

Environmental and consumer advocates will hopefully see more comprehensive justice in the Dieselgate scandal in the months to come.

–Posted by Emma Niles