Volkswagen today announced that it had reached a settlement with owners of Audi, Porsche, and VW vehicles fitted with its 3.0-liter V-6 diesel engine.
Different remedies apply depending on the vehicle's model year: 2009 through 2012 cars will be bought back, while 2013 through 2016 vehicles will be modified to comply with emission limits.
The announcement ticks off another box off its lengthy list of problems stemming from the VW diesel scandal that erupted in September 2015.
The 2009 through 2012 vehicles are limited to the Audi Q7 TDI and the Volkswagen Touareg TDI, both SUVs, called the "Generation 1" vehicles under the settlement.
According to the details released this morning, the carmaker will buy back the 2009-2012 vehicles outright, or offer a trade-in credit on another vehicle from the same maker.
If those cars were leased, it will terminate the leases. Altogether, they number about 20,000 vehicles.
2009 Volkswagen Touareg TDI
So-called "Generation 2" vehicles from 2013 through 2016 are the Audi Q7 TDI SUV (sold 2013-2015), the Porsche Cayenne Diesel SUV (2013-2016), and the Volkswagen Touareg TDI SUV (2013-2016).
Starting in 2014, the Audi Q5 TDI SUV and A7 TDI hatchback, and A6 TDI and A8 TDI sedans are added; all were sold through 2016.
The second-generation cars, totaling 65,000 altogether, will be recalled and modified at no cost to their owners.
The settlement announced today consists of two separate agreements.
One is with the owners and lessees of the affected vehicles, as plaintiffs in a class-action suit. They are represented by a court-ordered committee on behalf of all such owners and lessees.
The second proposed agreement is a Consent Order submitted by the U.S. Federal Trade Commission (FTC).
2014 Audi A6 TDI
Assuming every first-generation vehicle can be bought back and every second-generation vehicle can be successfully modified, VW estimates its total cost for this settlement at $1.2 billion.
Last month, VW agreed with the U.S. Justice Department to pay a criminal fine of $2.8 billion, and operate under the oversight of a court-appointed independent monitor for three years.
That fine accompanies VW's guilty plea to three felony counts of criminal misconduct under U.S. law.
In addition, the company will pay a further $1.45 billion to settle civil claims by the Customs and Border Protection agency under U.S. customs and environmental laws.
2015 Porsche Cayenne Diesel
Those two settlements settle U.S. criminal charges over its emission cheating on diesel engines.
The various U.S. diesel settlements have now cost the company more than $20 billion, which exceeds the amount set aside on its balance sheet more than a year ago for the costs of the entire scandal globally.
As for the V-6 diesel settlement, a hearing will be held February 14, after which time Volkswagen can notify owners of their rights under the settlement.
This settlement must still be granted final approval by the court overseeing the case. According to Volkswagen, the earliest such an approval could occur is this coming May.