Volkswagen AG will pay owners of its polluting diesel cars up to $7,000, and agree to fund a grant program to offset air pollution, under a $10 billion settlement being negotiated for submission to a federal judge next week, people familiar with the talks said.
VW will provide cash payments worth between $1,000 and $7,000, depending on the vehicle's age and other factors, to compensate consumers, the people said. All spoke on the condition they not be identified because U.S. District Judge Charles Breyer, who is supervising the settlement discussions, has imposed a gag order.
The environmental remediation program is a key priority for regulators looking to undo the damage of 482,000 diesel cars that emit up to 40 times the permitted amounts of smog-forming nitrogen oxides. VW isn't expected to be able to repair all of the cars affected to the satisfaction of the EPA, which may result in buybacks or extra payments to the environmental fund.
The Wolfsburg, Germany-based carmaker has admitted that since 2009 it rigged cars to pass U.S. Environmental Protection Agency and California Air Resources Board emission tests. VW, the EPA, CARB and the Justice Department, and attorneys representing affected consumers are scheduled to present a settlement agreement June 28.
Read Friday's Arkansas Democrat-Gazette for full details.