Volkswagen reached an agreement June 28 to buy back some consumer vehicles and provide funding for clean transportation, as part of the fallout from its wide-ranging diesel emissions scandal that was revealed last year. The grand total of the company’s multiple settlements and agreements could reach as much as $15.3 billion.
Per the deal, the company will set aside $10.033 billion to cover buy-backs and or potential fixes on 475,000 2.0-liter diesel vehicles from the 2009-2015 model years. Volkswagen will reportedly offer a buy-back equivalent to the “Clean” NADA value, and use data from before September 2015 to account for lost value due to the scandal. For lessees, Volkswagen will also offer to terminate the remainder of the lease at no cost. For owners with outstanding loans, the company will pay off the remainder of those loans, up to a figure 130 percent of the amount of any buy-back.
While the company is vowing to fix the vehicles of consumers who don’t want a buy-back, the fact is that at this point, they do not have a fix that is approved by the government. Volkswagen has seen past proposals for a fix rejected by the government. In addition, this settlement only covers 2.0-liter models, and not any of the 3.0-liter diesel-powered vehicles also implicated in the scandal. That will have to be dealt with separately.
Besides the costs related to consumer vehicles, Volkswagen has agreed to pay $2 billion over 10 years to fund EPA and California state programs dealign with electric vehicle charging infrastructure, zero-emission ride-sharing fleets, and other measures meant to subsidize sales of alternative-fuel vehicles. The company will provide an additional $2.7 billion over three years to government and tribal agencies, which would use the money to replace old buses or to build new infrastructure at ports (in order to reduce diesel emissions). Finally, Volkswagen announced June 28 that they had reached a separate settlement with at least 44 U.S. states, the District of Columbia and Puerto Rico that will cost at least $600 million.
This settlement is just the tip of the financial iceberg for the German automaker; company officials may still be subject to criminal charges (in the U.S. or abroad) and may still face litigation from owners. In addition, shareholders may not regain their confidence in the company for years. Although shares briefly rebounded after news of the settlement (closing up 1.7 percent); shareholders expressed their considerable anger at a meeting on June 22, calling for the ouster of the court-appointed chairman of VW’s supervisory board.
The specific numbers of the buy-back program may be found here. Information for owners, including a look-up to see if your vehicle is included, may be found here. The statement from the Department of Justice is available here.
Read more: http://www.reuters.com/article/us-volkswagen-emissions-settlement-idUSKCN0ZD2S5; http://www.cnet.com/roadshow/news/its-happening-volkswagen-to-repair-or-buy-back-diesel-vehicles/