It's a gloomy day across much of Europe, with markets in turmoil after UK residents voted to "Brexit" the EU. Volkswagen isn't doing much to improve matters: thanks to its ongoing Dieselgate scandal, the company is poised to make a massive payout to the U.S. (and its diesel owners), one employee is being arrested in South Korea, and the road to Volkswagen's recovery seems longer than ever.
Here are six of top Volkswagen stories we've been watching:
1. Volkswagen will pay $10.2 billion to U.S. owners, government: The details of Volkswagen's plan to fix and/or buy back 482,000 2.0-liter Audi and VW diesels in the U.S. won't be officially released until Tuesday--unless a federal judge extends the deadline again. However, bits and pieces of the settlement began to leak out yesterday, thanks to anonymous sources "briefed on the matter". If those rumors are correct, diesel owners will have their cars fixed free of charge, and they'll also receive payments ranging from $1,000 to $7,000. (There's no word of buybacks yet, but stay tuned.)
Those payments are likely to cost Volkswagen around $7.5 billion. The company will also shell out roughly $3 billion in fines to various agencies, with the Environmental Protection Agency, the California Air Resources Board, and the Federal Trade Commission likely receiving the bulk of it.
And no, there's still no word about fixes for the 85,000 Audi, Porsche, and VW 3.0-liter diesels affected by Dieselgate.
2. Audi and VW owners have lost $1,500 in resale value: If details of the settlement are correct, it'll be good news to Audi and VW owners who've been trying to sell their illegally rigged 2.0-liter diesels. According to at least one analysis, those cars have lost an average of $1,500 in resale value--though for models like the VW Jetta Sportwagen, the loss has been closer to $2,300.
3. VW kills its only American hybrid: VW has exactly one hybrid car in its U.S. lineup, and when the 2017 model-year kicks off, it'll have none. Zero. Zip. Zilch. Admittedly, the Jetta Hybrid is pricey and a slow-seller, so killing it off makes good financial sense. However, if VW can't sell one measly hybrid, it makes us wonder how the company plans to develop and sell a slew of electric models within nine years.
4. Surprise: VW dealers are frustrated over delays: Within days of admitting to the EPA that it had equipped nearly 500,000 vehicles with defeat devices designed to cheat on emissions tests, VW stopped selling 2.0-liter diesels in America. More than nine months later, those models are still gathering dust, and dealers have no idea if or when they'll be allowed on sales floors. Dealers have also had to tell loyal diesel owners to be patient and wait for a fix to be announced. Although that announcement is due next week, many dealers seem well past the breaking point, which could further slow VW's recovery.
5. New criminal probe targets current and former Volkswagen execs: German officials are investigating former Volkswagen Group CEO Martin Winterkorn, current VW brand chief Herbert Diess, and at least one unnamed Volkswagen board member over charges of market manipulation. The investigation centers on whether the executives could've warned shareholders about potential financial losses related to the Dieselgate scandal before news of it broke last September. If they're found guilty, they could serve up to five years in das slammer.
6. South Korea issues warrant for Volkswagen executive's arrest: The Germans may settle for investigations, but South Korea isn't playing around. The country has issued an arrest warrant for a Volkswagen executive identified by the last name Yun. Two other execs in South Korea have been slapped with criminal complaints over emissions violations, the company has been fined 14.1 billion won ($12 million), and has been ordered to recall 125,522 vehicles.
Note: for purposes of clarity, "Volkswagen" has been used to refer to the Volkswagen Group parent company, while "VW" has been used to refer to the company's popular mass-market brand of automobiles.