Car Industry

Volkswagen to offer buybacks, payouts for affected diesel owners

Turns out there might be a light at the end of this tunnel, after all.

Arno Burgi, © Arno Burgi/dpa/Corbis

Talk about fixing the diesels on US roads, instead of buying them back, is surprisingly scant.

Armin Weigel/dpa/Corbis

Thursday marked the "deadline" when Volkswagen and US regulators were supposed to come to an agreement on what to do with the 500,000 or so VW diesels over-polluting on American roads. Originally, it was thought that the two parties would miss this deadline, which is actually an extension of an earlier deadline. Apparently, that's not the case.

Reuters is reporting that Volkswagen and the US Department of Justice have reached a "deal in principle" regarding VW's over-polluting diesels.

The meat and potatoes of the deal involves money, and lots of it. According to Reuters, the full settlement between the US and VW should involve buybacks, where Volkswagen reacquires its dirty diesels by buying them off owners, along with additional payouts to owners based on lost value or other factors.

There will also be an environmental remediation fund, because the atmosphere didn't walk away from this debacle unscathed. Suffice it to say, Volkswagen will be paying out the ass for its misdeeds. Reuters' sources claim this agreement will cost VW at least $10 billion.

"Volkswagen is committed to earning back the trust of its customers, dealers, regulators and the American public," the company said in an emailed statement. "These agreements in principle are an important step on the road to making things right. As noted today in court, customers in the United States do not need to take any action at this time."

We won't know the full story, including specific figures, until late June. That's when the involved parties must file preliminary proposals on this settlement, and that's followed by a preliminary hearing in late July. While this is far from over, it appears there will actually be an end to all this.

Volkswagen came under intense global scrutiny after it admitted to installing "defeat device" software in its vehicles. This software could intentionally curb emissions in lab-testing environments, only to have those vehicles pollute well above legal limits once they're out on the road. This software is installed on some 11 million vehicles worldwide.

Update, 12:34 p.m. Eastern: Added manufacturer response.