Volkswagen Group on Tuesday agreed to recall an additional 83,000 vehicles and pay $250 million to partially settle claims related to its actions to cheat on vehicle emissions tests.
The agreement that VW reached with the Environmental Protection Agency (EPA), Justice Department and California concerns vehicles with 3-liter diesel engines.
It closes a major chapter in the ongoing worldwide scandal discovered last year, when VW admitted that it programmed vehicles to emit less nitrogen oxides from diesel engines during emissions tests than they do on the road.
The settlement, which government officials estimate will cost the company $1 billion, is meant to ensure that the high-polluting vehicles are kept off the road or are fixed and the company contributes to efforts to reduce emissions in the future.
The $250 million payment will go to existing funds to pay for efforts to mitigate emissions. Most of it will go to a federal fund that gets distributed to states, tribes and localities, though $25 million will go to a California effort related to zero-emission vehicles.
The vehicles at issue were sold under the Volkswagen, Audi and Porsche brands. The vehicles are generally larger than sedans and often SUVs.
The deal follows on a settlement VW reached with regulators two months ago regarding around 500,000 cars sold with smaller 2-liter engines that cheated emissions testing.
“In this settlement, we’re taking steps toward holding Volkswagen accountable for its violations of law and what we consider to be their breach of the public trust,” John Cruden, head of the Justice Department’s environment division, told reporters.
“Finding a way to remedy this situation caused by Volkswagen is a complex matter, but this outcome provides a mechanism for Volkswagen to make the environment whole by removing the cars from the road and by offsetting harmful emissions caused by their cheating,” he said.
"This settlement is about taking pollution out of the air we breathe. It’s about supporting our state and tribal partners on projects that will make our communities healthy places to live,” said Cynthia Giles, head of enforcement at the EPA.
The settlement announced Tuesday makes VW take older 3-liter vehicles off the road. But VW says it can fix newer vehicles to comply with emissions standards, which would allow it to avoid buying them back.
The Tuesday deal is limited to the civil claims under the Clean Air Act. It does not cover penalties, Federal Trade Commission claims, lawsuits from customers, issues outside the United States and other claims in the scandal.
Volkswagen said it was glad to reach the settlement.
“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,” Hinrich Woebcken, president of Volkswagen’s United States operations, said in a statement.
“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.”