Volkswagen to pay $200 million for cheating 3.0-liter diesels (but how much will owners get?)

December 19, 2016

In September 2015, Volkswagen's Dieselgate scandal first began making headlines. Now, more than a year later, the gift that's given both nonstop headlines and harmful levels of pollutants is giving something else: $200 million in federal fines.

That money is part of the company's settlement with U.S. regulators over 80,000 illegally equipped 3.0-liter diesels made by Audi, Porsche, and VW. It's specifically earmarked for pollution reduction and will be added to a $2.7 billion fund created in June as part of a package that dealt with emissions from 2.0-liter diesels manufactured by Audi and VW.

The money will be made available to states to reduce their reliance on older diesel vehicles, including trucks, buses, ferries, and tugboats. States can use the funds to retrofit existing vehicles with emissions-reducing technology or to purchase new vehicles.

The $200 million is part of a much larger agreement with regulators surrounding the 3.0-liter diesels--a deal that has nearly been finalized. U.S. District Judge Charles Breyer, who also oversaw the 2.0-liter settlement, gave Volkswagen and regulators until today to reach consensus on the package.

Reports indicate that Volkswagen will fix about 60,000 of the 80,000 larger diesels affected by the emissions scandal, and the company will buy back 20,000 older models that would be too expensive or complicated to repair. The big sticking point of the deal appears to be how much owners will receive in compensation.

As you might recall, Volkswagen agreed to pay owners of 2.0-liter diesels anywhere from $5,100 to $10,000, over and above the cost of repairing or buying back their vehicles. Since those sums were based in part on the initial price of the vehicles, and since the 3.0-liter models are larger and in some cases considerably more expensive, we'd expect to see compensation run a fair bit higher. Stay tuned. 

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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