As expected, a federal district-court judge gave preliminary approval yesterday to a plan for Volkswagen to buy back or modify hundreds of thousands of 2.0-liter diesel vehicles sold from 2009 through 2015.
The cars, sold by VW and Audi, contained "defeat device" software that kept their emissions within legal limits only during testing, but bypassed emission controls in real-world driving.
Volkswagen must buy back or modify 85 percent of the 466,000 cars sold with those engines. Separately, it will pay owners who agree not to sue the company up to $5,000 each.
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It will also set up two distinct funds, one to take older diesel vehicles off the road and another to pay for infrastructure necessary to encourage sales of zero-emission vehicles.
Those two funds will total $4.7 billion; the total cost of the settlement plan is expected to run to $15 billion or more.
VW must still work out a separate settlement plan with the EPA and the powerful California Air Resources Board for 85,000 vehicles from Audi, Porsche, and Volkswagen that were fitted 3.0-liter V-6 diesel engines.
EDITOR'S NOTE: This article has been updated, below, to add the date of the hearing after which the judge can approve the final settlement plan.
2009 Volkswagen Jetta TDI
But preliminary approval of the plan for the 2.0-liter diesels does not mean that owners will start receiving their buyback offers next month.
The next step is that owners will be officially notified of their legal rights under the settlement. Those notices should start going out within a few weeks.
The buyback offers have to wait until the final approval from the judge, which will only come after an October 18 hearing.
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The formal buyback offers will have to wait until Judge Charles Breyer grants final approval to the settlement plan. That will likely take place sometime this fall.
That could be a year or more from the EPA's announcement of Volkswagen's cheating, which came on September 18 last year.
And owners who want to consider having their cars modified will have to wait further still, to see if the EPA and CARB approve modification plans for the various different models—and what impact on performance and fuel economy those changes will produce.
2015 Volkswagen Golf TDI SE
Volkswagen issued a statement yesterday following the official approval of the preliminary settlement:
Volkswagen appreciates the constructive engagement of all the parties, under the direction of Judge Breyer and with the active participation of Special Master Robert S. Mueller III, as the settlement approval process moves forward.
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The parties believe that the proposed settlement program will provide a fair, reasonable and adequate resolution for affected Volkswagen and Audi customers.
Owners can find more information about the settlement program and its terms at www.VWCourtSettlement.com.