Europe's Volkswagen owners are still getting shafted by Dieselgate

June 16, 2017

If you live in Europe and you own one of the 11 million Volkswagen diesels affected by Dieselgate, we regret to inform you that you're still getting shafted--at least in comparison to your peers across the pond.

Last summer, 480,000 American owners of Audi and Volkswagen diesels equipped with defeat devices to help them cheat on emissions tests learned that they were due for substantial payouts.

Each of them would receive a check ranging from $5,100 to $10,000, which was Volkswagen's way of compensating owners for deceitful business practices. They were also told that Volkswagen would either repair diesels, bringing them in line with federal regulations, or the company would buy them back for their pre-Dieselgate trade-in values. In April we learned that more than 97 percent of owners opted for buybacks.

All told, Volkswagen set aside more than $10 billion for compensation payments, buybacks, and fixes in the U.S.. And that's in addition to the gift card program that the company launched here in late 2015.

In Europe, where the vast majority of Dieselgate vehicles were sold, you might think that the automaker would be preparing for even greater losses. But oh, you'd be wrong.

In talks with the European Union's head of consumer affairs, Vera Jourova, Volkswagen recently confirmed that it would fix all European diesels equipped with defeat devices, and that those fixes would likely be completed this fall. That alone will be a gargantuan task, given that 77 percent of the 11 million vehicles affected by Dieselgate are registered in Europe (That's about 8.4 million cars.)

In speaking with Jourova, there was also talk of offering two-year extended warranties to Europe's Volkswagen owners. However, Volkswagen hasn't made that offer public, and it's unclear whether it was definitively in the works or just a topic of discussion.

What's clearly not up for debate is any talk of compensation to European owners, much less buybacks. 

Why? Volkswagen has two lines of reasoning:

1. It would be cost-prohibitive. Compared to the U.S., Europe has more than 17 times the number of Audi, Seat, Skoda, and VW diesels affected by Dieselgate. If Volkswagen allotted $10 billion for U.S. payments and buybacks, it would need to find about $170 billion to run a comparable program in Europe. As Volkswagen has argued before, such a sum would be untenable.

2. The company has done nothing illegal. Automobiles are regulated much more strictly here in the U.S., where a federal investigation found Volkswagen guilty of criminal wrongdoing and levied a $4.3 billion fine against the company in January. In Europe, however, Volkswagen insists that it hasn't technically broken any laws, and thus, it's not obligated to pay the EU or European owners any kind of compensation. (Stay tuned, though: there's a criminal investigation underway in Germany that could cost the company in the future. Whether consumers would see any of that dough seems iffy.) 

So, to recap: in Volkswagen's home territory of Europe, diesel owners can get their cars' software updated, overriding the factory-installed defeat device. Apart from that, they'll receive no compensation and no buyback offer. They don't even get gift cards, dammit. 

If you happen to be one of those 8.4 million Europeans and you feel you're getting the sticky end of the gummy bear, there is a small ray of hope. Though class-action suits are a largely American phenomenon, single owners have begun suing Volkswagen in Germany, and there may be some momentum on their side. A U.S. law firm is facilitating the process, which could help matters. Best of luck.

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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