Volkswagen has agreed to pay out $14.7 billion in a US settlement over its emissions-cheating diesel-powered cars, pledging to buy back or fix cars that tricked pollution tests, and pay each owner up to $10,000 in cash.
The huge settlement filed in federal court Tuesday gives the first indication of the financial cost to the German auto giant of the months-long scandal unfolding on both sides of the Atlantic over its fraudulent practices.
Under the deal, Volkswagen agreed to create a pool of $10 billion to compensate owners and pay a $2.7 billion environmental penalty that will help remediate pollution around the United States.
The company will invest an additional $2.0 billion “to create infrastructure for and promote public awareness of zero emission vehicles,” the court filing showed.
The settlement, which must be approved by a federal judge in San Francisco who is overseeing the litigation, could affect some 480,000 owners of Volkswagens and Audis with 2.0-liter diesel engines.
Deputy US Attorney General Sally Yates told a news conference the investigation is not yet over.
“This partial settlement marks a significant first step towards holding Volkswagen accountable for what was a breach of its legal duties and a breach of the public’s trust,” she said.
“And while this announcement is an important step forward, let me be clear, it is by no means the last. We will continue to follow the facts wherever they go.”
Yates noted that the settlement does not cover civil penalties for violations of the Clean Air Act or a criminal investigation. The deal does not affect a parallel probe into the company’s 3.0-liter diesel engines.