April 21, 2016 — Volkswagen (VW) has offered to fix or buy back nearly 500,000 2.0-liter TDI “Clean Diesel” cars that were sold with sophisticated software designed to cheat emissions tests in the United States.
Reuters reported that the car-maker offered to pay $5,000 to each affected customer, but others said no decisions had been made about the amount of individual compensation.
The cash compensation is an incentive to get customers to participate in a buyback program or get their cars repaired. VW will offer to fix the cars in the future if they can agree upon an acceptable repair with U.S. regulatory agencies.
The proposal was presented today to U.S. District Judge Charles R. Breyer in San Francisco. The settlement also allows VW to avoid a trial that was scheduled for this summer. Owners will have two years to decide whether to sell their car or get it fixed.
According to the New York Times, Jude Breyer said owners will receive “substantial compensation” and the settlement “will fully address any excess emissions and environmental consequences.”
The proposed settlement is a step forward, but VW is still facing massive fines for violations of the Clean Air Act. The Environmental Protection Agency (EPA) says the fines could be as high as $18 billion, but legal analysts expect the actual costs to be much lower.
VW executives have apologized and blamed a couple of rogue engineers for the scandal. The so-called “defeat device” could sense when the car was being tested for emissions and temporarily reduce pollution. On the road, the cars emit up to 40X the acceptable level of nitrogen oxide (NOx), a toxic gas that can cause respiratory problems.