Economy

VW diesel emission fixes given U.S. approval, avoiding buybacks

VW diesel emission fixes given U.S. approval, avoiding buybacks”

The approval brings German automaker Volkswagen AG closer to resolving a costly and embarrassing scandal that began two years ago, when the company admitted that more than 550,000 vehicles in the USA - and 11 million worldwide - were created to cheat on emissions tests.

Volkswagen, the best-selling automaker worldwide in 2016, could have been forced to pay up to $4.04 billion if the U.S. Environmental Protection Agency and California Air Resources Board failed to approve fixes for all 3.0-liter diesel vehicles. The settlement means VW won't have to buy back 2013-16 Porsche Cayenne and Volkswagen Toureg models as well as 2013-2015 Audi Q7 SUVs equipped with 3.0-liter diesel engines, according to Reuters.

The approved fixes will remove the "defeat device" software that made it appear the vehicles' emissions during testing were below the legal limit. As part of that settlement, VW agreed to pay owners of vehicles who obtain fixes between $8,500 and $17,000.

Volkswagen said it was pleased with the approval and added it is working with regulators to develop fixes for other 3.0-liter vehicles "as quickly as possible".

- Last year, the company agreed to a almost $15 billion settlement that required it to buy back or fix 475,000 2-liter diesel cars in the U.S. If regulators hadn't approved the fix, VW would have had to buy back the vehicles.

It means the German carmaker can fix most of the vehicles rather than buy them back as part of a settlement of a class-action lawsuit, potentially saving the company billions of dollars.

The company is still awaiting approval for fixes for passenger cars outfitted with the 3.0-liter diesel.

Volkswagen has acknowledged installing the illegal software on almost 600,000 vehicles in the US and some 11 million globally. Newer models reportedly only need a software upgrade, while some of the older models will require both software and hardware. In the USA alone, Volkswagen has reached legal settlements with prosecutors, regulators, consumers, dealers and state attorneys general collectively eclipsing $20 billion depending on how many vehicles the auto maker repurchases. Those owners also received compensation ranging from $7,755 to $13,880. It now plans to introduce more than 30 electric-powered vehicles by 2025 and sell 2 to 3 million of them per year.



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