Volkswagen AG has taken another step towards rebuilding relationships with its customers after the Environmental Protection Agency (EPA) discovered the company cheated on vehicle emissions tests. In September, Volkswagen confessed to installing software in its U.S. vehicles that identified when the vehicles were being tested, thereby altering the car’s performance accordingly to improve test results. This resulted in the vehicles emitting 40 times the legal amount of pollution. The consequential settlement includes almost 500,000 U.S. customers and government regulators and is valued at $4.7 billion. The recent accomplishment by VW in the settlement includes preliminary approval for VW to buy back up to 475,000 vehicles from its customers with diesel engines. U.S. District Judge Charles Breyer also set a date for potential final approval on October 18 in San Francisco. The preliminary approval that has just been granted allows owners of 2.0 liter diesel-powered Volkswagen vehicles to determine how much money they are eligible to receive by going online a website. Announced in June, the settlement is the largest automotive buyback in U.S. history, as well as the most expensive scandal rooted in the auto industry. The future buybacks, potential vehicle repairs, and financial dues to government agencies account for $10 billion of the total settlement value.
Volkswagen has been working with regulators to establish various solutions to the emission problem, all which must be approved. Two already discussed solutions are software renovations and the installation of new catalytic converters. These fixes only apply to the 2.0-liter models, but VW is in the process of developing a proposal to fix 85,000 3.0-liter vehicles. This comes after an initial proposal was rejected by the California Air Resources Board said a Justice Department lawyer. This initial proposal included VW and Audi vehicle model years 2009-2016 but was deemed “insufficient” to adequately fix the emission problems. Since the rejection, VW has been conversing with regulators about an improved proposal said Joshua Van Eaton, a Justice Department lawyer. Breyer is hoping for updates on the solutions for 3.0 liter vehicles during an August 25 hearing. Continue reading