Volkswagen
AG and Volkswagen Group of America, Inc. have reached an agreement with the
United States Department of Justice (DOJ) to resolve civil claims regarding approximately
83,000 affected 3-litre TDI V6 diesel engine vehicles in the US.
The agreement is with the Environmental Protection
Agency (EPA) and the State of California, by and through the California Air
Resources Board (CARB) and the California Attorney General, to resolve civil
claims regarding V6 diesel engine vehicles in the US.
The agreement, in
the form of a proposed Consent Decree, is subject to the approval of Judge
Charles R. Breyer of the United States District Court for the Northern District
of California, who presides over federal Multidistrict Litigation (MDL)
proceedings related to the diesel matter in the US.
The proposed
agreement would allow Volkswagen to recall more than 75 per cent of affected 3-litre
TDI V6 vehicles to bring them into compliance with the emissions standards to
which they were certified, if appropriate modifications are approved by EPA and
CARB.
As disclosed by the
Court, VW has also reached agreement with the Court-appointed Plaintiffs'
Steering Committee (PSC) on substantial aspects of the monetary relief that
eligible owners and lessees would receive, and the parties are working to
resolve the remaining issues.
Details of these
discussions remain subject to a confidentiality order of the Court. The Court
has scheduled a status conference on Thursday 22 December at 11am PT for the
parties to report on progress towards a resolution and set a deadline of 31
January 2017 for the parties to submit a formal agreement to the Court.
"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-litre TDI V6 claims as quickly
as possible," said Hinrich J. Woebcken, president and chief executive
officer of Volkswagen Group of America, Inc. "We are committed to earning
back the trust of all our stakeholders and thank our customers and dealers in
the US for their patience as the process moves forward."
Under the terms of
the proposed Consent Decree, Volkswagen has agreed to:
1.
Recall approximately 63,000 affected 2013-2016
Model Year Volkswagen, Audi and Porsche 3-litre TDI V6 vehicles with so-called
Generation 2 engines to bring them into compliance with the emissions standards
to which they were certified, if appropriate modifications are approved by EPA
and CARB. If Volkswagen is unable to meet this requirement, it will offer to
buy back or terminate the leases of these vehicles and may also seek approval
by EPA and CARB to offer customers a modification to substantially reduce their
nitrogen oxide (NOx) emissions.
2.
Buy back or terminate the leases of approximately
20,000 affected 2009-2012 Model Year Volkswagen and Audi 3-litre TDI V6
vehicles with so-called Generation 1 engines or, if approved by EPA and CARB,
modify the vehicles to substantially reduce their NOx emissions so as to allow
eligible owners and lessees to keep them.
3.
Contribute US$225 million to the environmental
remediation trust that is being established under Volkswagen's 2-litre TDI settlements
in the US to fully mitigate the lifetime NOx emissions of the affected 3-litre
TDI V6 vehicles.
4. As part of its agreement with the State of California, Volkswagen will
also pay $25 million to CARB to support the use of zero emissions vehicles
(ZEVs) in the State.
The terms of the
proposed agreement will be effective and final only after approval by the
Court. At the earliest, approval will occur during spring of 2017. Affected
3-litre TDI V6 customers do not need to take any action at this time, and can
visit www.VWCourtSettlement.com for more
information.
By its terms, the
proposed Consent Decree announced today is not intended to apply to or affect
Volkswagen's obligations under the laws or regulations of any jurisdiction
outside the US. Regulations governing NOx emissions limits for vehicles in the
US are much stricter than those in other parts of the world and the engine
variants also differ significantly.
This makes the
development of technical solutions in the US more challenging than in Europe
and other parts of the world, where implementation of an approved program to
modify TDI vehicles to comply fully with UN/ECE and European emissions standards
has already begun by agreement with the relevant authorities.
COMMENT. Interestingly, there
is still no statement from VW explaining why its diesel engines were modified
in the way they were (especially bearing in mind US emissions regulations), who
decided such modifications were necessary, who ultimately sanctioned the
modifications (bearing in mind the potential loss of trust which VW might
undergo), which department within VW developed the modifications, and whether
any outside consultancies were involved in developing (or evaluating) the
modifications at the behest of VW.
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