VW reached a settlement with US and California authorities to recall 83,000 diesel cars with 3-liter diesel engines, resolving the last major part of its emissions cheating scandal.
The agreement, involving VW, Audi and Porsche cars, is another step towards allowing Volkswagen to put the emissions cheating scandal behind it.
In June the German auto maker agreed to a $15 billion settlement for another 475,000 vehicles affected by the scandal.
The Environmental Protection Agency (EPA) estimates that the total cost of the 3-liter settlement, including buybacks, repairs, and environmental remediation, at about $1 billion.
VW reached a $14.7 billion settlement with 550,000 owners of smaller, 2-liter diesel cars in September.
About one-quarter of the affected owners will be able to sell their vehicles back to VW at a price yet to be determined. The other 60,000 vehicles will be repaired at no cost to their owners, becoming fully compliant with clean-air laws.
US District Judge Charles Breyer said owners of the 3-liter cars made between 2009 and 2016 would get “substantial compensation” for having them fixed or repaired.
However, there were some remaining issues to be resolved and another hearing will be held on December 22, he said.
VW spokeswoman Jeannine Ginivan said the deal was “another important step forward in our efforts to make things right for our customers”.
The company admitted in September 2015 to installing secret software in 475,000 US 2-liter diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing than they really were. They emitted up to 40 times the legally allowable pollution levels.
The $15 billion settlement in June covered those vehicles, including an offer to buy them all back.
The US Justice Department said VW had agreed to contribute another $225 million to a fund to offset excess diesel emissions.
In a separate filing, California’s government said VW would increase the number of electric vehicles it sells in the state.
Robert Bosch, the German engineering company that made the software for the VW diesels, has also agreed in principle to settle civil allegations at a cost of about $300 million.
Volkswagen has reached a deal with the US authorities under which the automaker could offer to buy back up to 500,000 diesel cars in the US.
VW has also agreed a compensation fund for owners.
The German car giant is expected to reveal the deal to a Federal judge in San Francisco on April 21.
A VW spokeswoman, the Environmental Protection Agency (EPA) and the Justice Department declined to comment.
The company could also offer to repair diesel vehicles if US regulators approve a fix at a future date, reports said.
In March, US District Judge Charles Breyer gave VW until April 21 “to announce a concrete proposal for getting the polluting vehicles off the road.”
Judge Charles Breyer said in March the “proposal may include a vehicle buy back plan or a fix approved by the relevant regulators that allows the cars to remain on the road with certain modifications.”
In September 2015, the EPA found that VW cars being sold in the US had a “defeat device” – or software – in diesel engines that could detect when they were being tested, and change the performance to improve results.
Some models could be pumping out up to 40 times the legal limit of the pollutant nitrogen oxide.
In March, VW CEO Matthias Muller said that a deal with US authorities over its emissions scandal could take longer and cost more than expected.
Matthias Muller warned that the €6.7 billion set aside to cover the costs of the scandal might not be enough.
German and French prosecutors have broadened their investigations into VW emissions scandal.
French authorities have opened a formal probe into “aggravated fraud” over the use of diesel engine devices that gave misleading emissions results.
German prosecutors said the number of VW employees now under investigation has increased from six to 17.
Volkswagen, which said it is cooperating with all inquiries, had about 11 million cars fitted with the emissions devices.
Europe’s largest automaker is carrying out its own investigation, and has warned that the cost of car recalls and compensation was likely to run into billion of euros.
Paris prosecutors started preliminary inquiries in 2015, and confirmed on March 8 that three magistrates had been assigned to a formal probe.
Serious fraud office chief Nathalie Homobono said investigators had established that VW had cheated “with intent” by installing so-called engine software that reduced emissions under test conditions.
Meanwhile, German authorities said they had increased the number of VW employers under investigation to 17, but added that no former or current board members are involved, said Klaus Ziehe, from the state prosecutors office in Braunschweig, Lower Saxony.
Also on March 8, Reuters and the Financial Times were among media reporting that German insurer Allianz Global Investors, a VW shareholder, was close to filing a lawsuit against the carmaker following the fall in VW’s share price.
In January, the US Department of Justice filed a civil suit against VW, and the automaker faces a string of claims from customers that lawyers are likely to consolidate into a class action suit.
VW says it will not comment on specific details of the investigations.
Spokeswoman Jeannine Ginivan told the AFP news agency: “As previously stated, Volkswagen is not commenting on ongoing discussions with regulators. We are committed to regaining the trust of our customers and dealers and will continue to cooperate with all relevant government agencies.”
VW has announced it will recall 8.5 million vehicles in Europe as a result of the diesel emissions scandal.
The move was prompted by Germany’s automotive watchdog (KBA), which earlier told Volkawagen to recall 2.4 million domestic cars.
German media reports suggest the KBA earlier rejected VW’s proposals that car owners could voluntarily bring their cars in for repair.
Meanwhile, Italian police have raided VW offices in Verona and Lamborghini offices in Bologna.
Reports suggest Italian prosecutors are investigating alleged commercial fraud.
Separately, the man tipped to become VW’s North America boss has resigned.
VW said Winfried Vahland was leaving because of “differing views on the organization of the new group region”.
The automaker gave no details of the recall and said it would contact individual customers directly.
VW added that it was working on solutions to fix the recalled cars “at full speed”.
Last month, authorities in the US discovered some VW diesel cars had been fitted with a device to cheat emissions tests. VW subsequently admitted that up to 11 million cars worldwide could have the device fitted.
VW has launched a thorough investigation into the scandal, but new chairman Hans Dieter Poetsch has warned that answers would take “some time”.
The company has set aside €6.5 billion ($7.4 billion) to cover the costs of the scandal, but some experts believe the final bill could be much higher.
VW shares recovered slightly last week but are still down almost 20% since the scandal broke in mid-September.
Germany’s automotive watchdog, the KBA, has ordered VW to recall 2.4 million vehicles in the country as a result of the diesel emissions scandal.
According to local media reports, the KBA earlier rejected VW’s proposals that car owners could voluntarily bring their cars in for repair.
Meanwhile, Italian police have raided VW offices in Verona and Lamborghini offices in Bologna.
Reports suggest Italian prosecutors are investigating alleged commercial fraud.
Separately, the man tipped to become VW’s North America boss has resigned.
Volkswagen said Winfried Vahland was leaving because of “differing views on the organization of the new group region”.
Last month, authorities in the US discovered some VW diesel cars had been fitted with a device to cheat emissions tests. The automaker subsequently admitted that up to 11 million cars worldwide could have the device fitted.
VW has launched a thorough investigation into the scandal, but new chairman Hans Dieter Poetsch has warned that answers would take “some time”.
The company has set aside €6.5 billion ($7.4 billion) to cover the costs of the scandal, but some experts believe the final bill could be much higher.
VW shares recovered slightly last week but are still down almost 20% since the scandal broke in mid-September.
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