Volkswagen’s Rumored $10 Billion Dieselgate Settlement Has One Small Problem

Carmaker is scheduled to file its fiscal mea culpa in federal court June 28.

byWill Sabel Courtney|
Volkswagen’s Rumored $10 Billion Dieselgate Settlement Has One Small Problem

Volkswagen is reportedly on the verge of submitting a $10 billion plan to U.S. regulators to literally and figuratively clear the air over the hundreds of thousands of American vehicles caught up in the Dieselgate scandal. But rumor has it there's a slight catch in VW's plans: the carmaker still doesn't have the all-clear from regulators as to how it will clean up its cars.

According to Bloomberg, sources close to the settlement say $6.5 billion of the deal will go to owners of affected vehicles, with the other $3.5 billion bound for California's regulatory agency and the U.S government.

One of the options available to owners as part of the settlement will be a method of having their cars fixed by VW, but as the EPA and CARB haven't given their blessings on a method to bring affected cars up to standards, there's no way of knowing whether Volkswagen will be able to offer it. Even if the carmaker finds a fix that satisfies regulators, owners could be waiting years to have their diesel vehicles brought up to code. According to Bloomberg's source, VW only has the capacity to fix around 5,000 cars per week nationwide; with almost half a million affected vehicles, the lag could be long enough to prompt people to take the alternative settlement option and sell their cars back to the company.

The car maker is required to file its plans to fix the cars and rectify its behavior with a federal judge in San Francisco by June 28. (The company was originally expected to deliver its plan months ago, but has filed for extensions.) The judge then has roughly a month to deliberate on the proposal before deciding whether it is acceptable or not.

The settlement might not be the final chapter for VW's Dieselgate dealings by a long shot, either. Here in the States, other federal and state agencies could still level fines for other types of diesel-related infractions, while the carmaker is staring down the barrel of numerous lawsuits in Germany, and criminal investigations are underway both here and in Volkswagen's homeland. At this rate, by the time this kerfuffle clears up, VW may not even sell diesel-powered cars anymore.