28 June 2016•Update: 29 June 2016
By Barry Eitel
SAN FRANCISCO
German automaker Volkswagen will pay a record $15 billion to consumers to settle a class action lawsuit, sources told various media outlets Monday.
The settlement is $5 billion higher than the rumored $10 billion settlement reported last week by sources close to the deal. It is also the biggest automotive buyback program in U.S. history as well as the costliest scandal in the auto industry.
The settlement will be officially filed Tuesday in a San Francisco court.
Last year, the Environmental Protection Agency announced that Volkswagen cars featured tweaked software in order to effectively cheat on emissions tests.
The deceit involved several diesel-powered models built by the carmaker between 2008 and 2015. Some diesel vehicles built by Audi and Porsche, which are owned by Volkswagen, were also affected.
After the scandal erupted, approximately 600 lawsuits were launched against the company by consumers and the Department of Justice.
The settlement to be announced Tuesday will likely involve 500,000 owners of Volkswagen vehicles, according to those familiar with the matter who spoke to media outlets.
Owners will receive an average of $5,000 per vehicle and some will receive as much as $10,000. On top of the settlement with each owner, Volkswagen will also offer to either buy back the vehicle or repair the engine.
The $15 billion settlement earmarks $2.7 billion to be set aside for environmental mitigation related to the falsified emissions figures and $2 billion to study zero-emissions technology. Volkswagen is expected to pay much more money in fees and penalties that are not connected to the settlement.
Because of a gag order, neither Volkswagen nor the Justice Department was able to officially comment on the settlement.
