Volkswagen Dieselgate update: U.S. dealers get $1.2 billion compensation, GM announces 3 new diesels

October 14, 2016

With less than a month to go before election day, most of America's news headlines are focused on the presidential election--and rightly so. But in the background, the non-stop fiacsco known as Dieselgate has been lumbering on. Here are a few of the recent items you might've missed:

America's VW dealers will receive $1.2 billion: VW dealers in the U.S. haven't been happy for a while. As if the terrible press, shrinking inventories, and slow sales brought on by Dieselgate haven't been bad enough, dealers have had little to no support--or even communication--from Volkswagen headquarters in Germany. For months, they've been pressuring the automaker for some kind of compensation package to help them through this very rough patch, and in August, it appeared that such a deal was imminent. 

That $1.2 billion deal has now been finalized. Over the next 18 months, the average U.S. VW dealer will receive some $1.85 million--but will it be enough to tide them over?

Charging station manufacturer cries foul over Volkswagen settlement: Back in June, we told you about Volkswagen's bank-breaking $15.4 billion settlement with the U.S. government over emissions-test-cheating devices found on 475,000 2.0-liter Audi and VW vehicles. Of that total, $2 billion was earmarked for improvements to the electric infrastructure that will make it easier and more attractive for Americans to purchase and power-up electric cars.

Though many thought that was a great plan, one company didn't: ChargePoint, which manufactures charging stations. The company is worried that VW will flood the U.S. market with its own charging stations--possibly offering free or subsidized service to electric car owners. And that, in turn, could spell doom for ChargePoint.

ChargePoint has asked U.S. District Judge Charles Breyer to intervene and prevent Volkswagen from overwhelming the charging station market. So far, the courts haven't been kind to ChargePoint, but Breyer could feel differently. He's slated to issue a final approval of Volkswagen's $15.4 billion package on Thursday, and he might be tempted to put in provisions for ChargePoint.

Diesel dead? Not according to General Motors: In the wake of the scandal, Volkswagen has reluctantly agreed to leave most of its diesels behind and focus on electric vehicles. That's led many to wonder if the diesel was really, truly dead. GM is betting that it isn't: the automaker is planning to release at least three diesel variants over the next two years--notably, for the 2018 Chevrolet Cruze and 2018 Chevrolet Equinox. Whether former VW customers will buy them is another matter.

Renewed EPA scrutiny snares Daimler's Detroit Diesel: Dieselgate has caused regulators around the globe to tighten inspection and approval practices, and in the process, companies like Harley Davidson have been hit with fines and other penalties.

The most recent victim is a Daimler subsidiary, Detroit Diesel, which has agreed to an $18.5 million settlement to resolve Justice Department claims that the company violated the U.S. Clean Air Act. Of that sum, $14.5 million will be used for environmental remediation, while the remaining $14 million is a straightforward civil penalty.

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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