VW to spend $3 billion more on rising cost of diesel buyback

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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]

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The Volkswagen diesel scandal no longer gets much U.S. media coverage.

Engineer James Liang has been sentenced to 40 months in jail for his role, while executive Oliver Schmidt will be sentenced December 6.

Buybacks and modifications are underway for more than half a million TDI diesel vehicles sold by Volkswagen, Audi, and Porsche. Now, other scandals now occupy the headlines.

DON'T MISS: VW engineer gets 40 months in jail, $200K fine, for diesel cheating role

But a statement issued Monday by VW Group in Germany hints that the U.S. effort will cost considerably more than planned: the group said it had increased financial provisions for the costs of the U.S. recall by €2.5 billion ($2.94 billion).

The increase results from that fact that "the settlements in North America [are] proving to be far more technically complex and time consuming" than originally projected.

To date, the costs of the recall, buybacks, and retrofitting have totaled roughly $25 billion; this new provision adds to that cost.

2015 Volkswagen Passat TDI

2015 Volkswagen Passat TDI

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Green Car Reports reached out to VW Group of America for more detail on why the buybacks and modifications were more challenging than expected.

Senior manager of corporate communcations Jeanine Ginivan responded with the following statement:

Unfortunately I am unable to comment beyond the release, other than to say that the company is assuring it puts the resources behind resolving the issue.

CHECK OUT: VW pleads guilty to felonies in diesel emission scandal (Mar 2017)

In negotiations with multiple agencies and to settle civil and criminal prosecutions, VW agreed to buyback or modify 460,000 vehicles fitted with various 2.0-liter TDI turbodiesel-4 engines and sold by Volkswagen and Audi from 2009 through 2015.

It also agreed to similar terms for roughly 85,000 larger VW, Audi, and Porsche vehicles fitted with two different 3.0-liter V-6 turbodiesels.

VW will spend $2.7 billion to establish an environmental mitigation trust to reduce emissions, and a further $2 billion over 10 years to establish and improve zero-emission vehicle infrastructure, under what is now dubbed the "Electrify America" program.

Detail from first of four phases of VW 'Electrify America' zero-emission vehicle infrastructure plan

Detail from first of four phases of VW 'Electrify America' zero-emission vehicle infrastructure plan

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The diesel scandal that broke two years ago in the U.S. continues to reverberate in Europe, where virtually every automaker has agreed to modify diesel cars to ensure they comply with emission limits.

Meanwhile, demand for used diesel cars has fallen as shoppers wait to learn whether those modifications affect the cars' fuel efficiency or performance.

The region's makers have also committed to trade-in incentives or buybacks for hundreds of thousands of the oldest and dirtiest diesel cars, those certified under standards in effect before 2005.

READ THIS: VW, Mercedes, Opel, Fiat launch buybacks of dirtiest diesels in Europe

Volkswagen Group will publish financial results for the first three quarters of this year on October 27.

Today's announcement essentially alerted financial analysts to the likelihood of continuing financial impacts from the VW diesel emission scandal.

Of equal interest, however, will be any discussion by VW executives on the costs of modifications agreed to by the company to millions of diesels sold in Europe, as well as buybacks of the oldest and dirtiest diesels in that market.

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