Volkswagen AG has reached a settlement with the concerned U.S. authorities for its infamous dieselgate scandal. According to a Reuters report, the carmaker has agreed to keep aside $ 10.033 billion towards buybacks and fixes, $ 2 billion towards green energy funds and $ 2.7 billion to counter the effect of the diesel emissions.
As a part of the settlement, Volkswagen AG will buy back 85 per cent of its 475,000 vehicles powered by the 2.0 TDI engines which exceed the emission limits by June 2019. Additionally, vehicle owners will receive a compensation between $ 5,100-10,000 along with the resale value of their cars.
Ever since news of the Volkswagen emission scandal broke, the resale value of itscars have tanked significantly. So Volkswagen will be buying back the affected vehicles at the resale value before the scandal became public.Under the settlement, Volkswagen needs to either repair or buy back 85 per cent of the 475,000 affected diesel vehicles by June 2019 or else it will get penalties of $ 100 million for every percentage that it falls short of.
The amount spent by Volkswagen for the settlement can reduce if itsfix for the 2.0-litre TDI engines gets approval and owners agree to get their cars fixed. The carmaker is likely to start the buyback process by October this year as by then the U.S. judge is likely to give a final approval to the settlement.
Volkswagen is not allowed to resell the vehicles it buys back either in U.S. or other markets until the Environmental Protection Agency okays a fix for the diesel engines. Also, the carmaker will announce a separate settlement with around 44 U.S. states, the District of Columbia and Puerto Rico which is expected to drain a minimum of $ 600 million.
This settlement does not include the affected Porsche and Audi vehicles with the bigger 3.0-litre TDI engine or the other civil fines and lawsuits that VW faces for the emissions scandal.
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