Volkswagen has settled two major Dieselgate-related lawsuits in North America, which could set the company back a further $3.4 billion dollars.
The first case is a US civil lawsuit in relation to the 3.0-litre V6 TDI engine that has a defeat device that detects laboratory emissions testing and is capable of putting the engine into a “temperature conditioning” mode, which limits NOx (oxides of nitrogen) output. Once the test is over, the engine operates normally and emits up to nine times the permitted levels of NOx.
As part of the proposed deal with the Department of Justice (DOJ), Environmental Protection Agency (EPA) and California Air Resources Board (CARB), the company will buy back or terminate the leases on around 20,000 2009 to 2012 model year Audi, Porsche and Volkswagen cars fitted with Generation One versions of the 3.0-litre V6 TDI engine.
The Volkswagen Group will also recall roughly 66,000 vehicles, across all three brands, that are equipped with Generation Two versions of the V6 turbo-diesel. If the company isn’t able to propose a fix that meets with the EPA’s approval, it will need to buy back those cars too.
Compensation will be given to owners of affected vehicles. According to the Associated Press, Judge Charles Breyer said that the compensation amounts will be “substantial”, but exact figures had yet to be worked out.
On top of this, Volkswagen will add a further US$225 million ($298 million) to the environmental remediation fund that was setup as part of its US$14.7 billion ($19.5 billion) deal with the government and owners over the 2.0-litre EA189 emissions cheating affair.
The remediation fund was originally seeded with US$2.7 billion ($3.6 billion) to counteract the effects of excess and illegal NOx put into the environment by the EA189 engine.
Finally, the company has agreed to hand over US$25 million ($33 million) to California to help “support the use of zero emissions vehicles” in that state.
All up, it’s estimated that the V6 TDI civil case settlement could cost Volkswagen around US$1 billion ($1.3 billion), although that figure excludes potential compensation costs.
Earlier this week, the company also agreed to a settlement with Canadian authorities regarding the 2.0-litre EA189 diesel engine at the heart of the Dieselgate affair. This deal might end up costing Volkswagen C$2.1 billion ($2.1 billion).
Owners and lessees of the roughly 105,000 affected vehicles in Canada will be eligible for between C$1275 ($1250) and C$8000 ($7820) in compensation.
The amount due depends on whether the car was purchased before or after the scandal broke, whether or not the owner/lessee intends to return or sell the car back to Volkswagen, and whether the owner/lessee still has the affected vehicle.
Vehicles covered by the settlement include select Audi A3, and Volkswagen Jetta, Golf, Passat and Beetle vehicles sold between the 2009 and 2015 model years and powered by the EA189 2.0-liter TDI motor.
The company will also pay a C$15 million ($15 million) fine to the Canadian government. Judicial approval for this deal isn’t expected to arrive until the end of March 2017.
In a statement released overnight, Volkswagen confirmed that it had received final approval from the German Federal Motor Transport Authority (KBA) for its proposed fixes to affected cars powered by the EA189 diesel engine family.
It’s understood that the fixes involve software upgrades for the 1.2-, 1.6- and 2.0-litre EA189 engines, with the 1.6-litre version also requiring the fitment of a airflow transformer.