The Cable

Report: Volkswagen to Pay $5,000 To Each U.S. Customer Affected by Diesel Cheat

German media report Volkswagen has agreed to pay billions to settle 'Diesel Gate' in the U.S.


There’s now a price on how much Volkswagen will have to pay to settle the U.S. case over its cheating of diesel emissions tests: $5,000 for each affected customer.

That’s according to Germany’s Die Welt newspaper, which first reported the figure on Wednesday. It comes a day ahead of a U.S. deadline to agree on a fix for nearly 600,000 diesel cars on U.S. roads that are installed with the technology to evade emissions tests. Die Welt reported the agreement would be presented Thursday to U.S. District Judge Charles Breyer in San Francisco.

Assuming each affected customer is defined as an individual buyer, Volkswagen is facing close to $3 billion in fines. Earlier Wednesday, Reuters reported that the iconic German carmaker was increasing the amount of money it set aside to much more than the $7.6 billion it had earmarked to settle with regulators, a sign that Volkswagen expects to pay even more fines down the line.  

Volkswagen did not return a request for comment, nor did the U.S. Justice Department. However, in a hint the settlement is coming, the Wolfsburg, Germany-based company said in an agenda for Thursday’s hearing in San Francisco that it does “not believe any expedited hearing or bench trial is appropriate or required.”

All in all, if the settlement is approved by the judge, it’s a good day for VW, considering the size of total fines they faced in relation to the Justice Department probe: up to $46 billion. VW stock rallied 6.6 percent on Germany’s DAX index as rumors of the settlement swirled in German media Wednesday.

But the company is far from out of the woods. In late March, the Federal Trade Commission sued VW for alleged false advertising – which could cost the carmaker $15 billion in fines. VW is also being sued by 278 of its investors worldwide for $3.7 billion. There are also investigations into the company in Germany, and across Europe. Four U.S. states have also filed lawsuits against VW. As many as 11 million cars around the world are affected by “Diesel Gate.”

VW’s brand has taken a steep hit that will be difficult to recover from. In February, it reported sales fell 13.2 percent from a year ago. Sales of the Passat, made in Tennessee, were down more than 30 percent. The cheat also been a blow to Germany’s national brand, which long represented manufacturing quality.

And further irritating its financial injuries, the company has been hit with a slew of vehicle recalls. In March, VW announced it would recall 800,000 sport-utility vehicles made by Volkswagen and its Porsche subsidiary over an issue with a loose pedal. This affects two of the company’s best-selling SUVs: 409,477 Porsche Cayenne and 391,000 Volkswagen Touareg vehicles.

Additionally, VW announced last month that it was recalling all 5,561 e-Golf battery-electric cars sold in the U.S. between May 21, 2014, and March 1, 2016. The reason? Faulty battery software could cause the car to crash.

Photo credit: CARSTEN KOALL/Getty Images

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