The Cable

Volkswagen Emissions Cheat Settlement Short On Specifics

The settlement between the U.S. and Volkswagen is short on details about how much drivers would be paid.


Those who expected to learn Thursday on just how much Volkswagen will have to pay out to settle a massive U.S. investigation into more than a half-million cars built to evade U.S. emissions tests are going to have to wait a little longer.

It turns out there is not yet an official dollar amount for what owners of nearly 500,000 Volkswagen 2-liter diesel vehicles with the emissions cheat would be compensated. And U.S. residents who own VW’s cheating 80,000 3-liter cars still don’t know how — or if — they’ll be repaid; these aren’t covered under the settlement.

At a Thursday hearing in San Francisco, senior U.S. District Judge Charles Breyer did not give details on exact remediation figures. Instead, he said, the deal between the U.S. government, the iconic German carmaker, and private attorneys includes “substantial compensation.” It allows owners of the 2-liter vehicles have Volkswagen either to buy back the cars or fix them.

The settlement also includes an environmental payback fund, but, again, there are no specifics on its size. After the Environmental Protection Agency disclosed the cheat last September, Volkswagen admitted to installing evasive devices on diesel models from 2009 through 2015.

Breyer set Thursday as the settlement deadline. The U.S. government and VW now have until June 21 to agree to specific dollar amounts and what the ultimate fix on the cars would be.

“It’s trite to say the devil’s in the details, but it doesn’t seem we have very much,” Carl Tobias, a product liability law professor at the University of Richmond, told Foreign Policy. “There’s an agreement in principle. But does that really tell us anything about the specifics? It doesn’t sound like there is much specificity to this.”

On Wednesday, German newspaper Die Welt reported owners of the cars with the emissions cheat would each receive $5,000. That would put total compensation for all the affected cars at around $3 billion. Also on 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 expected to pay even more fines down the line. But late Wednesday, the Associated Press reported the company would spend just over $1 billion to compensate U.S. owners.

In response to these leaks, Breyer issued a gag order and took all parties to task for leaks to the media.

The settlement also covers a Federal Trade Commission lawsuit against VW for alleged false advertising. That could have cost the carmaker $15 billion in fines. Volkswagen 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.”

“It’s frustrating not to have more detail,” Tobias said. “In the short term we still don’t know what the fix is.”

Neither Volkswagen nor the U.S. Justice Department returned a request for comment Thursday.

“Volkswagen is committed to winning back the trust of its customers, its dealers, its regulators and all of America,” VW lawyer Robert Giuffra said at the hearing. The agreements are “an important step forward on the road to making things right.”

Photo credit: RALF HIRSCHBERGER/Getty Images

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