The company will recall more than 83,000 affected models from 2012 to 2016.
Following reports that Volkswagen Group would place $200 million into a fund for nearly 80,000 vehicles with affected 3.0-liter TDI engines, an official statement from the EPA confirms that a partial settlement will force VW to pay $225 million and agree to recall and/or buy back as many as 83,000 affected models.
The recall and buyback affects VW, Audi, and Porsche vehicles – mostly SUVs – produced between 2009 and 2016. Separated into two "generations," generation one encompasses 2009 to 2012 VW Toureg and Audi Q7 diesel models.
Because the company can not modify those affected generation one vehicles to meet EPA-certified exhaust emissions standards, VW is required to buy back the cars and offer lessees a lease cancellation at no cost. A total of 63,000 cars are part of the buyback.
Generation two vehicles, meanwhile, will be recalled and fixed to meet certified exhaust emissions standards. Those generation two vehicles include the 2013 through 2016 VW Toureg diesels, 2013 through 2015 Audi Q7 diesels, 2013 through 2016 Porsche Cayenne diesels, and 2014 through 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, and Q5 diesel models.
The new $225 million fine is just a small add on to the $2.7 billion the company is already required to pay into a trust to fund projects that aim to reduce NOx emissions, and another $2 billion to improve infrastructure and development of zero emissions vehicles over the next 10 years.
Within that ten-year period, the company has agreed to add at least three additional electric vehicles to its lineup by 2020, including an SUV. VW has also agreed to pay California’s state air board $25 million in fines.
"The agreement announced by the Court today between Volkswagen and U.S. environmental regulators is another important step forward in our efforts to make things right for our customers, and we support the efforts of the Court to bring about a fair and reasonable resolution of remaining 3.0L TDI V6 claims as quickly as possible," said Hinrich J. Woebcken, President and CEO of Volkswagen Group of America, Inc.
Volkswagen AG and Volkswagen Group of America, Inc. (together, Volkswagen) announced today that they have reached an agreement with the United States Department of Justice (DOJ) on behalf of the Environmental Protection Agency (EPA) and the State of California, by and through the California Air Resources Board (CARB) and the California Attorney General, to resolve civil claims regarding approximately 83,000 affected 3.0L TDI V6 diesel engine vehicles in the United States.
The agreement, in the form of a proposed Consent Decree, is subject to the approval of Judge Charles R. Breyer of the United States District Court for the Northern District of California, who presides over federal Multidistrict Litigation (MDL) proceedings related to the diesel matter in the United States. The proposed agreement would allow Volkswagen to recall more than 75 percent of affected 3.0L TDI V6 vehicles to bring them into compliance with the emissions standards to which they were certified, if appropriate modifications are approved by EPA and CARB.
As disclosed by the Court, Volkswagen has also reached agreement with the Court-appointed Plaintiffs’ Steering Committee (PSC) on substantial aspects of the monetary relief that eligible owners and lessees would receive, and the parties are working to resolve the remaining issues. Details of these discussions remain subject to a confidentiality order of the Court. The Court has scheduled a status conference on Thursday 22 December at 11am PT for the parties to report on progress towards a resolution and set a deadline of January 31, 2017 for the parties to submit a formal agreement to the Court.
“The agreement announced by the Court today between Volkswagen and U.S. environmental regulators is another important step forward in our efforts to make things right for our customers, and we support the efforts of the Court to bring about a fair and reasonable resolution of remaining 3.0L TDI V6 claims as quickly as possible,” said Hinrich J. Woebcken, President and CEO of Volkswagen Group of America, Inc. “We are committed to earning back the trust of all our stakeholders and thank our customers and dealers in the United States for their patience as the process moves forward.”
Under the terms of the proposed Consent Decree, Volkswagen has agreed to:
Recall approximately 63,000 affected 2013-2016 Model Year Volkswagen, Audi and Porsche 3.0L TDI V6 vehicles with so-called Generation 2 engines to bring them into compliance with the emissions standards to which they were certified, if appropriate modifications are approved by EPA and CARB. If Volkswagen is unable to meet this requirement, it will offer to buy back or terminate the leases of these vehicles and may also seek approval by EPA and CARB to offer customers a modification to substantially reduce their nitrogen oxide (NOx) emissions.
Buy back or terminate the leases of approximately 20,000 affected 2009-2012 Model Year Volkswagen and Audi 3.0L TDI V6 vehicles with so-called Generation 1 engines or, if approved by EPA and CARB, modify the vehicles to substantially reduce their NOx emissions so as to allow eligible owners and lessees to keep them.
Contribute $225 million to the environmental remediation trust that is being established under Volkswagen’s 2.0L TDI settlements in the United States to fully mitigate the lifetime NOx emissions of the affected 3.0L TDI V6 vehicles.
As part of its agreement with the State of California, Volkswagen will also pay $25 million to CARB to support the use of zero emissions vehicles (ZEVs) in the State.