Volkswagen will pay approximately $14.7 billion to settle a diesel-emissions scandal, the largest automotive settlement in U.S. history. The scandal began in September 2015 when the Environmental Protection Agency (EPA) revealed that Volkswagen had installed deceptive software in its diesel-powered cars. The software allowed the cars to pass emissions tests while emitting nitrogen oxide at 40 times the legal limit. More than $10 billion from the settlement will be utilized to buy back or fix the nearly 11 million diesel-powered vehicles equipped with the software. The EPA gets $2.7 billion for environmental remediation and the remaining $2 billion will be invested in American clean energy technology. Present and former owners of affected vehicles are entitled to compensation from Volkswagen, anywhere from $5,100 to $10,000. Current owners may sell their vehicles back to Volkswagen at pre-emissions scandal valuation if they choose not to have their vehicles repaired. These options are available until December 1, 2018. The final settlement amount could rise above $15 billion as almost 40 state attorneys general reach resolutions with Volkswagen. Another $603 million will be paid to end litigation in multiple states as well as Washington D.C. and Puerto Rico, according to Volkswagen. California’s state Attorney General has announced that Volkswagen will pay penalties of $86 million to the state. This penalty amount will resolve clams the state made against Volkswagen regarding California’s unfair competition law in addition to federal violations. This is how the $86 million will be allocated:
- $76 million will go to the Attorney General’s office to defray investigation and litigation expenses pertaining to the emissions scandal.
- $10 million will be used as grant money for universities and government agencies, to partially fund studies into technology which can detect devices similar to those found in the Volkswagens.
