VW to Pay $1.2 Billion in 3.0L TDI Case
As the dust settles, a lot of cash is left in its wake.
Aside from the 2.0L TDI settlement that made headlines for VW last year, the manufacturing group now has news on how it will repay owners of 3.0L TDI V6 powered cars. The announcement affects around 78,000 models, making it a smaller yet still noteworthy occurrence. Total costs are said to end up totalling $1.2 billion including buy-back programs and vehicle fixes.
This news includes a number of models from several VW brands including Audi and Porsche. "Generation 1" 3.0L TDI vehicles include the 2009-2012 Volkswagen Touareg and Audi Q7, making up a lesser portion of the overall recall. "Generation 2" models were produced later on and include 2013-2016 Volkswagen Touareg, Audi Q7, A6, A7, A8, Q5, and Porsche Cayenne. This totals up to around 58,00 of all affected models.
Compensation is heavy for current 3.0L TDI owners. Automotive News reports that owners who decide to have their vehicle fixed will be paid $7,000-$16,000 by the manufacturer, often amounting up to more than the market value of each vehicle. The report also says that owners will be reimbursed $500 if the repair affects performance. Lastly, those who choose to have their car bought back by the company will receive an additional $7,500 on top of the value of their vehicle.
The proposal is yet to be approved by regulators. It's unsure what the fixes will entail, but expect it to be fairly extensive as the entire emissions system will have to be gone through. If this bid is not accepted by US courts, Automotive News says VW may end up paying an astonishing $4 billion in total, raising the current number significantly.
Hinrich J. Woebcken, CEO of Volkswagen Group of America, recently announced “We will continue to work to earn back the trust of all our stakeholders and thank our customers and dealers for their continued patience as this process moves forward."
This comes in addition to additional programs set to subsidize their vehicles' affect on the environment. They are currently paying $225 million for these programs with the chance of more in the future. Along with their own development of electric cars, they are also being charged $25 million to help California grow their EV infrastructure, according to Motortrend.
All in all, this will be significantly less costly to VW than the 2.0L TDI settlement. That incident reportedly cost the manufacturing group $14.7 billion along with many fines and 475,000 cars affected.
Despite all of this news, VW was still the largest automaker in the world for 2016. Their recent troubles with the Dieselgate scandals have led them to the decision to drop TDI vehicles from their lineup and produce electric cars in the US by 2021.