Volkswagen Dieselgate update: Germany approves fixes, bigger compensation packages coming to U.S.?

August 15, 2016

If you live in Europe and own a vehicle that's been affected by the Volkswagen diesel scandal, we have good news to share in our quasi-weekly roundup of Dieselgate news.

If, on the other hand, you actually work for Volkswagen...well, maybe you should grab another cup of coffee first.

1. Germany green-lights fix for 460,000 smaller diesels: Of the 11 million vehicles tainted by Dieselgate, 8.5 million are registered in Europe. Before Sunday, German regulators had approved fixes for over 4.5 million of those cars, and now, they've approved a software upgrade that will fix 460,000 more. The affected vehicles are equipped with 1.2-liter EA189 engines and were manufactured by brands like VW and Seat. (FYI, decisions by German regulators apply across Europe, so Volkswagen doesn't have to obtain approvals country-by-country.)

2. Three illegal software programs found in Audi engines: Here in the U.S., Volkswagen is closing in on a fix for the 475,000 2.0-liter Audi and VW diesels affected by Dieselgate. Unfortunately, efforts to repair 85,000 larger, 3.0-liter, Audi, Porsche, and VW vehicles aren't progressing as smoothly. In July, California rejected Volkswagen's proposal for those vehicles (again),  and now, regulators discovered that those engines--which were manufactured by Audi--contain not one, not two, but three illegal bits of software. That might sound shocking, unless you recall earlier reports which lay the blame for Dieselgate squarely on the shoulders of Audi engineers. 

3. Consumer Reports pushes for higher compensation packages: The magazine says that Volkswagen's proposed buyback prices undervalue Audi and VW 2.0-liter diesels by several hundred dollars. Also, the magazine says that Volkswagen needs to allow owners to sell their cars back to the company even after they've been fixed because the vehicles might perform very differently following repairs.

4. Owners' lawyers want nearly $333 million in fees: Remember the $10 billion settlement package for Audi and VW owners that was announced back in June? It was, of course, negotiated by lawyers, who have now filed paperwork for their fees, which total nearly $332.5 million. Volkswagen has agreed to pay "reasonable" fees, so the question becomes: is one-third of $1 billion "reasonable"?

5. Volkswagen follows Tesla's playbook, partners with solar company: Earlier this year, Tesla CEO Elon Musk told the world that he wanted the automaker to buy SolarCity (in which Musk also holds a huge stake). He explained his position a bit further in July when he unveiled Tesla's "Master Plan Part Deux", then he announced a $2.6 billion merger of the two companies on August 1.

Though many in the media have derided Musk's plan, folks at Volkswagen apparently think he's onto something, because they're rumored to be in talks with SMA Solar, a German company that builds solar energy systems. Like Tesla, Volkswagen may believe that the key to success in tomorrow's electric car market --in which the company may or may not compete--is a strong partnership with a battery-maker.

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.

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