As expected, yesterday U.S. District Judge Charles Breyer signed the final agreement among Volkswagen, the EPA, and the state of California covering the bulk of VW's diesel emission cheating scandal.
The agreement means that buyback offers can now be issued to owners of almost half a million vehicles sold by Volkswagen and Audi from 2009 through 2015 that were fitted with 2.0-liter TDI diesel engines.
Those engines were fitted with "defeat device" software that kept them compliant with emission limits only when being tested on a dynamometer in the laboratory.
The software in question eliminated use of the emission controls when the car was operating on open roads in real-world use, leading to emissions of nitrogen oxides from some models that soared at times up to 35 times the legal limits.
The VW diesel cheating scandal broke into public view on September 18, 2015, when the EPA announced that engineers at the German carmaker had admitted to using the defeat software to get the cars to comply with new and more stringent emission standards that took effect on January 1, 2008.
VW Group had ignored hybrid-electric vehicles and put all its effort into developing and marketing so-called "clean diesel" technology, which it promoted heavily in states like California where hybrids had established a notable beachhead.
2012 Volkswagen Passat TDI Six-Month Road Test
More than a year after the scandal broke, the judge's signature enables VW to start issuing buyback offers to the 475,000 owners of 2.0-liter diesel vehicle once they have registered and taken their cars to a consultation with a settlement specialist at a VW dealership.
Owners have through September 1, 2018, to decide whether to participate in the settlement, including the buyback offer.
Alternatively, owners who want to keep their cars can wait to find out if VW develops a modification for their specific vehicles that is approved both by the EPA and the California Air Resources Board.
Reaction to news of the judge's signature on the final agreement was predictably positive.
“We are very pleased the Court has granted final approval to this historic settlement that holds Volkswagen accountable for its illegal behavior and breach of consumer trust," said Elizabeth Cabraser, lead counsel for the consumer plaintiffs.
"We encourage all class members to take advantage of the significant compensation this settlement provides, which also fixes or removes these polluting cars from our roads."
2009 Volkswagen Jetta TDI
“Volkswagen broke the law, and today by approving the settlement, Judge Breyer is making them pay the price," said The Sierra Club director Kathryn Phillips in a somewhat pithier statement.
"Volkswagen chose to poison our families with dangerous pollution just to pad its pocketbook. This settlement is a move in the right direction toward cleaning up Volkswagen’s dirty deceit.
“The funds won't fully compensate owners who thought they were buying a better vehicle, but it is a strong step toward ensuring Volkswagen won't try to cheat again.
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“We commend Judge Breyer, the regulatory agencies, and the Department of Justice," concluded the environmental group, "for this strong settlement to rein in Volkswagen and make sure the company pays for its bad actions."
Volkswagen Group of America issued a statement, including the following quotation from Hinrich J. Woebcken, its president and CEO:
“Final approval of the 2.0L TDI settlement is an important milestone in our journey to making things right in the United States, and we appreciate the efforts of all parties involved in this process. Volkswagen is committed to ensuring that the program is now carried out as seamlessly as possible for our affected customers and has devoted significant resources and personnel to making their experience a positive one."
Volkswagen TDI 'clean diesel' television ad screencap
The settlement signed yesterday does not apply to a further 85,000 vehicles from Audi, Volkswagen, and Porsche that were fitted with a larger 3.0-liter V-6 diesel that also used "defeat device" software.
Vehicles equipped with the 3.0-liter diesel V-6 include five different Audi models—A6, A8, and A8L TDI sedans; the A7 TDI hatchback; and the Q5 and Q7 TDI sport utility vehicles—along with the Porsche Cayenne Diesel and the VW Touareg TDI.
The next hearing at which Volkswagen and U.S. regulators will update Judge Breyer on the status of negotiations over a settlement for the 3.0-liter vehicles will be November 3.
Meanwhile, owners of 2.0-liter diesels from 2009 through 2015 continue to be able to register with the VWCourtSettlement website to learn what buyback amount they can receive for their car.
Registering does not require the owner to take the buyback amount, which is based on the vehicle's used-car value in September 2015 before news of the scandal broke, with adjustments for mileage covered, options, and condition.
Owners can submit their buyback claims online (at the VWCourtSettlement website), by phone (1-844-98-CLAIM), or using a paper claim form.
2009 vw jetta tdi 008
Once a claim is approved, the owner will take the diesel car to a VW dealer to meet with a dedicated claim specialist. Those appointments are expected to begin early next month.
In addition to the amount paid by VW Group for the diesel vehicle buyback, owners will receive $5,000 for agreeing not to sue the carmaker for its actions in selling them a noncompliant vehicle.
A small number of owners, however, have chosen not take part in the settlement, but instead to sue VW to receive their full purchase price back—as is the case in certain other lawsuits alleging sale of a fraudulent good.
Still, most analysts expect the majority of the 475,000 owners to take the buybacks.
It is not yet clear how Audi and Volkswagen plan to dispose of the noncompliant diesel vehicles it buys back.