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Volkswagen Will Reportedly Pay $1 Billion for Cheating on US Emissions Tests

The Germany automaker has admitted to using sophisticated software to cheat on emissions tests, which is the biggest scandal in the history of the company and led to the resignation of its CEO.

by Matt Smith
Apr 20 2016, 9:23pm

Photo by Julian Stratenschulte/EPA

Volkswagen may end up paying $1 billion to settle claims by the US government over a scheme to rig emissions test for its diesel-powered cars, according to a deal reported Wednesday.

The settlement could be disclosed at a court hearing in San Francisco on Thursday, the Associated Press reported, citing an unidentified person who had been briefed on the deal. Details of how much each owner would get aren't included in the agreement at this point, the source said.

Reuters reports that the $1 billion payment will be made in addition to an offer to buy back from owners almost 500,000 vehicles sold in the United States.

Neither Volkswagen nor the Justice Department had any comment on the report Wednesday afternoon.

Related: The 'Long Shadow' of Volkswagen's Cheating Scandal Falls on France's Renault

The Justice Department sued Volkswagen for $48 billion in January, alleging that the company violated the Clean Air Act by dodging emissions controls in nearly 600,000 vehicles in the United States — and several million more in Europe.

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.

It's the biggest scandal in the German automaker's nearly 80-year history, resulting in the resignation of its CEO, Martin Winterkorn and a steep drop in its stock price in the wake of the revelations.

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

Follow Matt Smith on Twitter: @mattsmithatl