VW Must Pay Out $5,000 To Each Customer Affected By Dieselgate

(REUTERS/Fabian Bimmer/Files)

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Chris White Tech Reporter
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Volkswagen reached a deal with the Environmental Protection Agency (EPA) over its carbon emission cheating devices, which requires the car maker pay $5,000 to each customer affected by the devices and to fix their vehicles.

The agreement will be presented to U.S. Judge Charles Breyer in San Francisco Thursday in order to avoid a long, drawn out trial, reports Reuters. Breyer gave both the EPA and VW until April 21 to hammer out a fix for the 600,000 diesel vehicles implicated by VW’s emissions cheating devices.

The car company acknowledged in September that it installed the “cheat devices” in vehicles, such as the Beetle and Porsche Cayenne, for the sole purpose of obscuring the car’s smog-producing nitrous oxide emission levels. VW is still facing fines, fees, and a $6.3 billion lawsuit in Europe.

Breyer had previously set a date for March 24 to have the German automaker and the EPA, the Justice Department, and the California Air Resources Board to discuss remediation efforts. CARB rejected a recall plan submitted by VW in January that would fix the more than 75,688 vehicles.

The plaintiffs proposed an expedited all-inclusive trial seeking punitive damages. Christopher Rother, a German lawyer affiliated with the case, told the German newspaper that European plaintiffs would seek to emulate the U.S. agreement.

The company, however, does “not believe any expedited hearing or bench trial is appropriate or required,” according to statements it has made leading up to the Thursday court hearing at the San Francisco district court.

Die Walt said there were no detailed proposals on how best to fix the vehicles included in the agreement. One of the sources told Die Walt the minutia and details will be hammered out in the coming months. Along with the payout, VW will also have to recall and fix the affected vehicles.

According to Reuters, sources tell Die Walt that the German automaker would have to increase the amount of money it set aside for the fix — VW currently has $7.6 billion stashed away for the fix.

Die Walt’s sources claim the European car maker will propose double digit billion dollar amounts for the payout by April 28. Analysts expect VW’s total costs from the scandal to reach more than $30 billion.

Expenses associated with the scandal could slash VW’s fourth-quarter profits by 70 percent or slightly more than $1 billion, a Reuter’s poll of analysts found.

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