German automaker Volkswagen AG (VW) yesterday announced a deal to pay out huge amounts of cash in order to mend damage caused by the Dieselgate scandal.
All up, the company plans to pay as much as $14.7bn to clean up the mess from this scandal.
Last year the company was found by the US Environmental Protection Agency (EPA) to be cheating on vehicle emissions tests, prompting fines, recalls and investigations in a number of countries.
The deal itself was made with the US Justice Department, Federal Trade Commission, EPA and California state regulators.
“By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our environment,” said Deputy Attorney General Sally Yates.
The huge sum of money promised by VW will cover the costs of buying back thousands of affected vehicles, as well as funding cleaner transport technology.
In total, the buyback will cover 460,000 Volkswagen and 15,000 Audi vehicles all of which made use of the 2.0L TDL engine produced by VW.
Reportedly, $10.03bn of this amount is to be set aside for vehicle buy-backs, while another $2bn will be paid by VW over the course of 10 years to fund the construction of electric vehicle charging infrastructure in California. Finally, another $2.7bn will be paid by the company to replace diesel-fueled busses.
“We can’t undo the damage VW caused to air quality, but we can offset that damage by reducing pollution from other sources,” said Yates.
Volkswagen explained in a statement that it was happy to pay these sums in the interest of winning back trust from consumers.
“We take our commitment to make things right very seriously and believe these agreements are a significant step forward,” said Matthias Müller CEO of Volkswagen AG.
“We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company.”
Beyond the deal made in California, VW also made separate deals in 44 other US states with an additional settlement amount of approximately $603m.