Volkswagen Agrees to $1 Billion Settlement Over 3.0-Liter Diesel Models in the U.S.

The beleaguered automaker tries to make things right. Again.

Volkswagen Settlement

Earlier today, Volkswagen announced it has reached a $1 billion agreement with U.S. regulators, in the form of both buybacks and fixes, for the afflicted 3.0-liter V-6 diesels. The number of Volkswagen, Audi and Porsche 3.0-liter vehicles in the U.S. lies in the ballpark of 83,000 units.

The $1 billion agreement, in this case called a "consent decree," also includes a $225 million payment VW will make to an environmental remediation trust committed to mitigating NOx emissions of the 3.0-liter diesels, plus an additional $25 million to the California Air Resources Board to support the introduction and use of zero emission vehicles in California.

Regarding the buybacks and fixes, Volkswagen will recall 63,000 of the 83,000 affected U.S. vehicles, and offer to buy back, terminate the lease of, or—if a way to do so is approved—fix the roughly 20,000 older models.

VW officially admitted to installing emissions cheating devices more than a year ago in their 2.0-liter diesels. In the U.S. alone, this meant nearly half a million vehicles were affected, each spewing out 40 times the allowable limit of NOx. The 3.0-liter vehicles, though, emit only up to nine times the allowable limit—which is still enough to get hit with some pretty heavy litigation.

While Volkswagen has gone through the ringer to make things right, only time will tell if this method of buybacks, payouts, and mea culpas actually works to salvage the company's reputation. Despite that, Hinrich J. Woebcken, President and CEO of Volkswagen Group of America, Inc. said, “We are committed to earning back the trust of all our stakeholders and thank our customers and dealers in the United States for their patience as the process moves forward.”