Volkswagen AG's price tag to settle lawsuits in the U.S. over its rigging of diesel emissions tests has jumped to more than $15 billion -- $5 billion more than previously reported, sources said Monday.
The settlement is expected to be filed today in a San Francisco court.
Car owners will get a total of $10.03 billion, which covers both the value of their vehicles before the scandal became public in September and compensation payments of as much as $10,000 apiece, two people familiar with the negotiations said. Those figures could rise if VW misses certain repair deadlines.
That total far exceeds any previous U.S. civil settlement with an automaker, and it brings VW closer to the $18.3 billion it has set aside to cover costs from the scandal.
The compensation figure jumped over the past few days, people said, as the parties changed their estimates on what it would take to get 85 percent of owners to trade in their vehicles under the settlement.
On top of the $10.03 billion, Volkswagen will pay $2.7 billion in fines that will go to the U.S. Environmental Protection Agency and the California Air Resources Board, and an additional $2 billion on clean-emissions technology, one of the people said. The carmaker is also expected to announce a settlement with states, including New York, for about $400 million, another person said.
The latest figure is a sharp increase from the $10 billion Volkswagen had been expected to pay to settle the lawsuits. The agreements between VW and the U.S. Justice Department, the EPA and the California Air Resources Board are to be filed today with Judge Charles Breyer of the U.S. District Court for the Northern District of California.
Wyn Hornbuckle of the Justice Department, Jeannine Ginivan of Volkswagen and Nick Conger of the EPA declined to comment.
VW, which has brands that include Audi and Porsche, has admitted to systematically rigging environmental tests since 2009 to hide that its diesel vehicles were emitting more pollutants than allowed under U.S. and California law.
Even if Breyer accepts the Volkswagen deal, the company will have many unsettled issues, with unknown costs, in the United States and abroad.
"It's clear Volkswagen desperately needed to put this horrible situation in the rearview mirror; they've negotiated this settlement with breathtaking speed," said David Uhlmann, a former chief of the Justice Department's Environmental Crimes Section.
Still, Uhlmann said, "Volkswagen's legal troubles won't end [today]."
Information for this article was contributed by Hiroko Tabuchi of The New York Times.
Business on 06/28/2016