Volkswagen to pay $14.7B to settle U.S. emissions claims

(Updated 11:19 a.m.)
DETROIT – Volkswagen AG has agreed to spend nearly $15 billion to get 480,000 emissions-cheating diesel vehicles off U.S. roads and placate regulators even as it struggles to devise an acceptable fix under an agreement with the U.S. government.

Under the agreement announced on Tuesday, car owners will have the choice of having Volkswagen buy back their vehicles or install whatever pollution-control retrofit is eventually accepted by regulators. In either case, the drivers will get as much as $10,000 each in additional compensation.

According to R.I. Attorney General Peter F. Kilmartin, 3,292 vehicles are affected by the agreement in Rhode Island. In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer protection laws, amounting to $570 million nationwide. This amount includes approximately $3.2 million paid for affected vehicles Volkswagen sold and leased in Rhode Island, according to Kilmartin.

VW will also have to pay $2.7 billion to federal and California regulators for a trust to fund pollution-reduction projects and also make a $2 billion investment in clean technology.

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The settlement total far exceeds any previous U.S. civil settlement with an automaker, and it brings VW closer to the 16.2 billion euros ($17.85 billion) it has set aside to cover the costs of the scandal.

If VW fails to get an 85 percent recall rate by June 30, 2019, it will have to pay $85 million more into the environmental mitigation trust for each percentage point of the shortfall. It will also have to pay an additional $13.5 million into the trust for each percentage point it fall below the 85 percent target in California.

VW, whose brands include Audi and Porsche, has admitted to systematically rigging environmental tests since 2009 to hide that its diesel vehicles were emitting far more pollutants than allowed under U.S. and California law.

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