Volkswagen and the U.S. Environmental Protection Agency said today that they had reached an agreement on a plan to address hundreds of thousands of diesel vehicles sold over six years deliberately designed to violate U.S. emission laws.
The agreement, released at 8 am California time this morning, complied with a deadline of today imposed by U.S. District Judge Charles Breyer for the parties to reach consensus on a plan.
The plan applies only to almost half a million 2.0-liter TDI diesel vehicles sold by VW and Audi from model years 2009 through 2015.
Altogether, roughly 482,000 vehicles sold by the two brands with 2.0-liter four-cylinder turbodiesel engines were found to have "defeat device" software that allowed them to emit far more nitrogen oxides in real-world conditions than during EPA tests.
The affected vehicles include the TDI diesel versions of the Volkswagen Jetta, Golf, Passat, and Beetle, and the Audi A3.
According to Road & Track, the "agreement in principle"—which is preliminary—owners of the affected cars will have the option either to sell them back to Volkswagen or to have them modified to comply with the EPA emission limits.
Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in 'cheat mode,' October 2015 [video frame]
Drivers of TDI vehicles who have leased them may cancel their leases without penalties.
The first of two compensation funds would pay an unspecified amount—described only as "substantial compensation," but rumored yesterday to be $5,000 apiece—to owners who agree to forgo the legal right to sue Volkswagen for its actions in selling them cars that violated the law.
The second fund would be established to support undefined "appropriate remediation efforts" to counteract the effects of the excess nitrogen oxide released by the vehicles.
Volkswagen will also promote "green automotive technology" through additional funds to be committed.
Judge Breyer also established two new deadlines for the parties to meet.
The EPA and Volkswagen must file all final details of the agreed-upon settlement on or before June 21.
2012 Volkswagen Passat TDI Six-Month Road Test
And the court will hold a preliminary hearing on the matter on July 26, after the fillings have been made available for review by the public—presumably including all those owners.
According to Jeannine Ginivan, a spokesperson for VW Group of America, the agreement in principle is confidential among the parties.
Those parties, incidentally, also include the powerful California Air Resources Board.
When the agreement is fully fleshed out and agreed upon, Ginivan said, it will be made available for public comment on the details.
Volkswagen issued the following statement following the announcement:
Volkswagen is committed to earning back the trust of its customers, dealers, regulators and the American public. These agreements in principle are an important step on the road to making things right. As noted today in court, customers in the United States do not need to take any action at this time.
Negotiations are still ongoing over a settlement to address the additional 85,000 vehicles from Audi, Porsche, and Volkswagen sold with a 3.0-liter V-6 turbodiesel engine that was also found to contain "defeat device" software.
Those vehicles include TDI models of the Audi A6, A7, and A8 sedans, and Q5 and Q7 SUVs; the Volkswagen Touareg TDI SUV; and the Porsche Cayenne Diesel SUV.