2010 Volkswagen Jetta TDI Sportwagen photographed in Washington, DC, USA.IFCAR
Sources speaking to Bloomberg and the Associated Press have said that Volkswagen Group will propose a $10.2 billion settlement in federal court next week.
The settlement will reportedly include payouts of $1,000 to $7,000 for owners of certain diesel vehicles that included illegal software to help the company cheat on US emissions tests.
VW Group is facing over 600 lawsuits from customers, consumer protection agencies, and regulators.
The suits are being overseen by US District Judge Charles Breyer in Northern California District Court.
In April, Judge Breyer said that VW Group would buy the 482,000 affected 2.0L diesel engines in the US back from owners in addition to paying out “substantial compensation” to affected customers.
According to the AP, Volkswagen and Audi owners will be able to choose between having VW Group buy their car back for whatever the car was worth before the scandal broke last summer or keeping their car and letting the manufacturer fix it.
It’s unclear whether VW Group will be able to find suitable fixes to make the affected diesel vehicles EPA-compliant.
The source speaking to the AP said “any fix would be expensive and likely would require a bigger catalytic converter or injection of the chemical urea into the exhaust to help neutralize the pollution.”
No matter how VW’s customers choose to deal with their cars, the amount they’ll receive in payout will reportedly be based on the car’s age.
As Bloomberg reports: “Car owners will be faced with complex calculations to figure out how much cash they might receive from Volkswagen, two of the people said, which could upset them and harm the carmaker’s relationship with buyers even further.“
The AP reports that a portion of the $10.2 billion settlement will go to a clean air fund to remediate pollution and a portion will go toward paying government penalties.
The bulk of the fund will be used in compensating car owners.
The sources spoke to these two news outlets on the condition of anonymity because Judge Breyer has issued a gag order on those involved in the litigation.
In April, the judge chastised the parties for previously speaking to the press.
The terms of the settlement could also change before the parties present it to the judge next week.
The settlement does not include owners of 3.0L diesel engines in the US, which were also found to be emitting nitrogen oxide (NOx) at levels far above what is permitted by the Environmental Protection Agency.
VW Group is also facing a lawsuit from the Federal Trade Commission, which alleges that the company engaged in false advertising with their “clean diesel” campaign.