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MORE pain for Volkswagen AG as the emission scandal this week adds another $US1 billion ($A1.38 billion) to the US bill, now at $US17.5 billion ($A24.15 billion) and still with possible additional payments to resolve US criminal investigations, state and federal environmental claims and fines by government watchdogs.

The latest expense comes as Volkswagen agrees on a $US1 billion settlement to fix or buy back another 80,000 diesel vehicles, this time fitted with the 3.0-litre V6 engine used by Volkswagen, Audi and Porsche products.

2009 Volkswagen Jetta

2009 Volkswagen Jetta


Within the $US17.5 billion agreement, the car-maker has committed to:

  • $US2.7 billion ($A3.73 billion) to a pollution-reduction fund from the 2.0-litre diesel engines. It will fund programs including buying low-emission buses for schools.
  • $US225 million ($A310.56 million) to offset emissions from the 3.0-litre diesel engines.
  • $US2 billion ($A2.76 billion) over 10 years to produce more zero-emission vehicles for sale in the US. California wants at least three new EV models by 2020. VW must sell an average of 5000 of these vehicles in the state each year from 2020 to 2025.
  • $US25 million ($A34.51 million) paid to the California Air Resources Board.

Separately, Robert Bosch will pay $US300 million ($A414.1 million) for its part in manufacturing the emission “cheat” devices used by Volkswagen.

In Canada, separate to the US agreements, Volkswagen has agreed to buy back up to 105,000 2.0-litre diesel vehicles that is estimated to cost the company $US1.6 billion ($A2.2 billion).

The president and CEO of Volkswagen Group of America, Hinrich Woebcken, said in a statement that the latest agreements were “another important step forward in our efforts to make things right for our customers”.

But ahead is the possibility of further fines and payments. A report from the US said that Volkswagen may have to spend additional “billions of dollars” with the US Justice Department over its criminal investigations. There are also claims by state and federal environmental agencies and fines from a national government monitor.

2011 Volkswagen Golf TDI

2011 Volkswagen Golf TDI

US district judge Charles Breyer, who announced the 3.0-litre V6 diesel settlement this week, was also the judge who in October approved Volkswagen’s earlier settlement worth about $US15 billion ($A20.7 billion) with regulators and the US owners of 475,000 diesel vehicles fitted with Volkswagen’s 2.0-litre engines. The sum included an offer to buy back all of the cars.

Judge Breyer this week also said Robert Bosch GmbH, the manufacturer of the software for the diesel engines, has agreed in principle to settle civil allegations made by US diesel vehicle owners.

Though confirming it had reached an agreement, Bosch said it was not accepting liability or admitting to the allegations made in the lawsuit by owners who said it was a knowing and active participant in Volkswagen’s emissions scandal.

Volkswagen admitted in September 2015 to installing software known as “defeat devices” in 475,000 US 2.0-litre diesel cars to secretly avoid exhaust emissions tests. The cars then appeared to be cleaner in laboratory testing than they were in on-road conditions but were actually producing up to 40 times the legal pollution levels.

More recently, Volkswagen admitted using “defeat devices” in the 3.0-litre V6 diesel vehicles. The 80,000 V6 US vehicles had emissions that were up to nine times the legal limits.

Volkswagen’s buy-back and customer compensation program is unique to the US where consumer laws are more stringent than most other countries.

By Neil Dowling

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