Volkswagen will fix or buy back about 500,000 2-liter diesel cars in the United States that are equipped with faulty emission control software, under a preliminary agreement with the Environmental Protection Agency and the California Air Resources Board announced Thursday. Those who leased the cars will be able to cancel the lease and return the car to Volkswagen.
However, not many details are yet available on how the cars will be fixed or what any buy-back arrangement would be.
“Seven months after news of Volkswagen’s emission scandal broke, we're glad to hear that there is a 'framework' for a settlement in the cases related to VW's 567,000 fraudulently marketed, illegally polluting cars,” said Mike Litt, consumer program advocate at U.S. PIRG Education Fund. “This framework appears to include all of the elements that a deal should include, but the devil will be in the details.”
“Given the nature of VW's violations, a settlement needs to make consumers whole and compensate for the environmental damage while totaling a penalty large enough to discourage VW and others from this behavior in the future," Litt said. "In the meantime, it’s worth noting that further delay means that these polluting cars remain on the road – emitting up to 40 times the allowable level of pollution – for even longer."
U.S. District Court Judge Charles R. Breyer set the deadline of June 21 to work out the details of the agreement.
At the hearing Thursday, Breyer said he was pleased with the progress the parties have made to come up with a concrete plan by the April 21 deadline. He told the parties to the cases to continue to keep the contents of the discussions and any proposed agreements confidential until they’re filed with the court.
In September 2015, the Environmental Protection Agency issued a notice of violation of the Clean Air Act to Volkswagen, alleging that four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015 include software that circumvents EPA emissions standards. California separately issued a regulatory letter to Volkswagen.
The cars are equipped with a “defeat device,” software that switches to cleaner emissions when the vehicles are hooked up to official emission testing equipment.
Volkswagen said that the “agreements in principle” are an “important step on the road to making things right.” The company said it’s “committed to earning back the trust of its customers, dealers, regulators and the American public.”
In Europe, more than 10 million cars have been affected by the cheating scandal. Volkswagen could also be subject to criminal fines in Europe and in the U.S. as well.
The agreement doesn’t include a separate lawsuit by Volkswagen dealers and possible charges and penalties by a coalition of 45 states.
The vehicles and model years affected by the agreement.
- Jetta TDI, 2009-2015
- Jetta SportWagen TDI, 2009-2014
- Golf TDI, 2010-2015
- Golf SportWagen TDI, 2015
- Beetle TDI and VW Beetle Convertible TDI, 2012-2015
- Passat TDI, 2012-2015
About 80,000 3-liter diesel vehicles, including Audi sedans and Porsche crossovers, have the problematic software. These cars aren’t included in the agreement.
Volkswagen is expected to spend billions to resolve the emissions scandal.