Report: Volkswagen to pay $10.2B to settle emissions scandal

Report: Volkswagen to pay $10.2B to settle emissions scandal
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Volkswagen will pay $10.2 billion to settle claims related to its emissions testing scandal, The Associated Press reported on Thursday. 

Citing an unidentified source, the AP said VW will spend the money to settle claims in the wake of last fall’s revelation the company installed software on its diesel vehicles designed to skirt federal emissions testing. 

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A Volkswagen official declined to comment on the report. The Environmental Protection Agency, which discovered the emissions-cheating scandal alongside California regulators and helped bring action against the company, also declined to comment. 

The AP reports the company will use the fines to compensate 482,000 owners of cars with 2-liter diesel engines, with owners receiving between $1,000 and $7,000, depending on the vehicle’s age. 

Bloomberg News reported that VW also agreed to set up a grant program to offset air pollution. The $10 billion cost of the settlement, according to Bloomberg, will go toward penalties for violating clean air laws, vehicle buy-backs and compensation for car owners.  

The agreement comes after months of back-and-forth between the company and federal officials that sued VW over the so-called “defeat devices" found to have been installed on 600,000 vehicles.  The company faces hundreds of lawsuits from consumers, as well, and a Federal Trade Commission lawsuit alleging false advertising.  

Negotiators initially hatched the deal in April after a federal judge set a deadline for a settlement. Terms of the deal are set to be formally announced next week.