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Volkswagen Agrees to Fix or Buy Back Over Half a Million Diesel Cars Sold in the US

The automaker has reached a settlement with the US Department of Justice after admitting it cheated on US clean air tests.

by Matt Smith
Apr 21 2016, 6:22pm

Joyce Ertel Hulbert, who owns a Volkswagen diesel car, holds a sign outside a San Francisco Federal Courthouse where claims against the automaker are being heard. (Photo by Noah Berger/EPA)

Volkswagen has agreed to fix or buy back more than half a million diesel cars it sold to US customers in a settlement over its effort to rig emissions tests, according to a proposal aired in court Thursday.

Volkswagen and the Justice Department laid out an agreement in principle during a hearing in San Francisco, where claims against the German automaker are being heard. The proposal comes more than six months after VW admitted that computers in numerous diesel-powered models had been programmed to defeat emissions controls on the open road — but run them when the cars were being tested.

Details of how much Volkswagen will end up paying owners or the government are still being hammered out, but the company will offer owners the chance to repair or return their vehicles, the New York Times reported. Volkswagen confirmed a settlement had been outlined, but provided no details.

"Volkswagen is committed to earning back the trust of its customers, dealers, regulators, and the American public," the company said in a statement on the proposal. "These agreements in principle are an important step on the road to making things right."

Related: Here's How Elon Musk Wants to Punish Volkswagen for Cheating

VW has been looking at a potential $18 billion-plus in environmental fines in the cheating scandal. The Justice Department sued the company for $48 billion in January, accusing it of violating the Clean Air Act by dodging emissions controls in nearly 600,000 vehicles in the United States — and several million more in Europe.

"This agreement in principle addresses one important aspect of the department's pending case against VW, namely what to do about the 2-liter diesel cars on the road and the environmental consequences resulting from their excess emissions," Justice spokesman Wyn Hornbuckle said in a statement issued Thursday. "The department's other investigations into VW's conduct remain active and ongoing."

VW has admitted to programming computers in its diesels to detect when a car was being checked out in a test center. The computers then adjusted the engine's performance to produce fewer emissions than under normal driving conditions.

Vehicles operating with the so-called defeat devices emitted up to 40 times the amount of nitrogen oxides allowable under US regulations, according to the Environmental Protection Agency.

And Japanese automaker Mitsubishi disclosed its own cheating scandal Thursday, admitting that rigged mileage tests for at least 620,000 "microcars" sold in Japan. Mitsubishi executives bowed low to apologize at a news conference and vowed to investigate the matter.

Related: Mitsubishi Becomes Latest Automaker to Admit to Cheating Consumers and Regulators

Follow Matt Smith on Twitter: @mattsmithatl