Volkswagen has reached a settlement with U.S. and California regulators to recall 83,000 diesel cars with 3-liter engines, resolving the last major part of its emissions cheating scandal.
The deal announced Wednesday involves larger Volkswagen, Audi, and Porsche models. About one-quarter of the affected owners will be able to sell their vehicles back to VW. The other 60,000 vehicles will be repaired at no cost to their owners, becoming fully compliant with clean-air laws.
U.S. District Court Judge Charles Breyer said Thursday that Volkswagen, the Federal Trade Commission and lawyers representing vehicle owners reached an agreement for "substantial compensation" for consumers.
The judge didn't spell out details of the cash payments. VW and the FTC said the court has ordered the parties to keep discussions confidential until papers are filed on Jan. 31.
The Environmental Protection Agency estimates that the total cost of the 3-liter settlement, including buybacks, repairs, and environmental remediation, at about $1 billion. The company reached a $14.7 billion settlement with 550,000 owners of smaller, 2-liter diesel cars in September.
Volkswagen has admitted installing software in millions of diesel vehicles from model years 2009 to 2016 to circumvent emission standards.
"EPA has a public health imperative to hold Volkswagen accountable and remedy the illegal pollution their cars put into the air," said Cynthia Giles, EPA's assistant administrator for enforcement. "From the start, our team vigorously pursued this case to ensure these cars were fixed or taken off the road."
Will Wallace, policy analyst with Consumers Union, the policy and mobilization arm of Consumer Reports, said it was disappointing the deal didn't offer more buybacks. More options may be needed for VW owners who aren't satisfied with the performance or fuel economy of their cars after the emissions repair, he said.
"Consumers were sold a different product than advertised, and they deserve to have the choice to no longer be a Volkswagen customer," Wallace said. "We will carefully examine the full deal once all terms are available, including details on a compensation program, and push for any changes necessary to truly make consumers whole."
The owners of VW Touaregs and Audi Q7 SUVs from model years 2009-2012 will get the buy-back option, District Court Judge Breyer said. People who have leases for those vehicles can return the cars to Volkswagen without penalty, he said. The company will also offer a fix for those cars, which will have to be approved by regulators. EPA said the fix would substantially improve emissions, but it doesn't think the cars can be made fully compliant with clean-air laws.
The bulk of the cars covered by the settlement will be fixed with a regulator-approved emissions repair. VW has said these cars, which already have urea-based emissions aftertreatment systems, have a much lower level of excess pollution than the other cars involved in the scandal, and the technical repairs aren't as challenging or costly.
If regulators determine VW can't bring the newer 3-liter cars into full compliance, those vehicle owners will be given the option of a buy-back or lease termination, EPA said.
VW will also compensate 3-liter diesel owners for the excess emissions, for misleading consumers about their cars' capabilities, and for loss of resale value.
A criminal investigation by the Justice Department continues, and the EPA is still weighing civil penalties for the violations of the Clean Air Act.
In a company statement, VW said it reached agreement with a committee of plaintiffs' attorneys on "substantial aspects of the monetary relief eligible owners and leasees would receive.''
VW called the deal "another important step forward in our efforts to make things right for our customers."
"We are committed to earning back the trust of all our stakeholders and thank our customers and dealers for their patience as the process moves forward," the German automaker added.
Here's the full list of the affected 3-liter diesels:
Generation 1
Audi Q7, 2009-2012
Volkswagen Touareg, 2009-2012
Generation 2
Audi Q7, 2013-2015
Volkswagen Touareg, 2013-2016
Porsche Cayenne, 2013-2016
Audi A6, 2014-16
Audi A7, 2014-16
Audi A8/A8L, 2014-16
Audi Q5, 2014-16
This story has been updated with Thursday's agreement on compensation.
