With terms of a final settlement between Volkswagen and the EPA on 482,000 TDI diesel vehicles due to be announced next Tuesday, Judge Charles Breyer has imposed a gag order on all parties.

That doesn't seem to have stopped unidenitfied sources from talking about possible terms contained in the settlement.

The latest rumor to emerge is that owners of the 2.0-liter diesel cars sold by Audi and VW between 2009 and 2015 will be offered a payment of between $1,000 and $7,000 depending on the car's age and condition.

DON'T MISS: VW settlement with EPA announced over diesel emission scandal (Apr 2016)

The suggestion comes from Bloomberg, which spoke to "people familiar with the talks" who spoke on the condition they not be identified.

Negotiations are still continuing, but the payment would apparently be separate from an offer by VW to buy back any of the 482,000 affected vehicles.

Last September, Volkswagen admitted that the vehicles had been rigged to pass emission tests when the cars detected they were performing an EPA test cycle, but ignore them in real-world use.

2015 Volkswagen Golf TDI SE

2015 Volkswagen Golf TDI SE

That led to emissions up to 35 times the legally permitted limit under some operating conditions, according to tests performed by the University of West Virginia in early 2014.

Other elements of the settlement, according to the Bloomberg report, include a fund for environmental remediation to be administered by a third-party, which Volkswagen would pay to establish.

It would follow the model of a smaller, earlier program—the Diesel Emissions Reduction Act—to remedy environmental damage by retiring older diesel trucks, retrofitting older transit buses with the latest emission aftertreatment systems, and so forth.

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The environmental remedy fund is taking on increased importance, according to the article, because Volkswagen cannot guarantee that all of the non-compliant vehicles can be modified to the EPA's satisfaction.

The issue is most acute, experts suggest, because it's largely assumed to be impossible to retrofit the necessary Selective Catalytic Reduction system (or "urea injection") to the 325,000 Audi and Volkswagen diesel vehicles that were sold without it.

Vehicles built with the urea-injection aftertreatment system could conceivably be reprogrammed to comply with the emission limits, though the effects on performance and fuel economy could make them less appealing to their owners.

Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in 'cheat mode,' October 2015 [video frame]

Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in 'cheat mode,' October 2015 [video frame]

The vehicles using the 2.0-liter TDI turbodiesel engine are:

  • 2015 Golf TDI, Golf SportWagen TDI
  • 2015 Audi A3 TDI
  • 2015 Jetta TDI, Passat TDI, Beetle TDI
  • 2012-2014 Passat TDI
  • 2009-2014 Jetta TDI, Jetta SportWagen TDI
  • 2010-2013 Golf TDI
  • 2012-2014 Beetle TDI
  • 2009-2013 Audi A3 TDI

CHECK OUT: VW diesel agreement: what we know (and don't know) in 5 questions

It's likely that lawyers for Volkswagen, the U.S. Environmental Protection Agency, and the powerful California Air Resources Board will negotiate through the weekend and right up until the terms of the final agreement are released by Judge Breyer on Tuesday, June 28.

After that, the public will have four weeks to comment on the proposed settlement, and a final agreement is to be released on July 21.

The total cost to Volkswagen of settling this case is likely to exceed $10 billion, according to the insiders.

2012 Volkswagen Passat TDI Six-Month Road Test

2012 Volkswagen Passat TDI Six-Month Road Test

That sum includes civil penalties, class-action suit settlements, the cost of buying back the cars whose owners want to sell them, payments to dealers to modify cars whose owners keep them, the environmental remediation fund, and the individual payments to owners above and beyond the buyback value.

Separate discussions are also 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.


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