The U.S. Justice Department and Environmental Protection Agency says Volkswagen will set aside $10.033 billion to cover buybacks and fixes, part of a $15.3 billion settlement with U.S. regulators over pollution caused by its diesel vehicles. Rough Cut (no reporter narration).
ROUGH CUT (NO REPORTER NARRATION) German automaker Volkswagen AG has agreed to pay more than $15.3 billion in a settlement with U.S. regulators over pollution caused by its diesel vehicles, according to a source briefed on the matter. The settlement stems from VW's admission in September that it intentionally misled regulators by installing secret software that allowed U.S. vehicles to emit up to 40 times legally allowable pollution. It covers 475,000 2.0-liter vehicles. The Justice Department filed a proposed consent decree that confirms VW will set aside $10.033 billion to cover buybacks and fixes, $2 billion to invest in green energy funds and $2.7 billion to offset diesel emissions. "Using the Clean Air Act, EPA has secured every consumer the choice of having VW buyback their car or their lease, or modifying their car at no cost if and when a modification to reduce emissions is approved," said Administrator of the U.S. Environmental Protection Agency, Gina McCarthy, during a news conference with the U.S. Justice Department. The actual amount VW will spend on buybacks could be significantly less if regulators approve fixes and owners opt to get vehicles repaired. Most owners will get at least $5,100 in compensation in addition to the pre-scandal value of the cars and up to $10,000, documents filed on Tuesday said. Volkswagen expects to begin buying back vehicles in October, when a U.S. judge is expected to give final approval to the settlement and is to start proposing fixes in November. Some vehicles will require significant mechanical fixes. VW cannot resell or export the vehicles bought back unless the U.S. Environmental Protection Agency approves a fix, the documents said. Volkswagen must repair or buy back 85 percent of the 475,000 vehicles by June 2019 or face penalties of $100 million for every percentage point it falls below that figure.