VW pays $1.7b to dealers

Volkswagen has agreed to open its chequebook to US brand dealers after its emissions scandal runs on, just over a year after first being revealed. Volkswagen will pay NZ$1.66 billion to 652 US brand dealers, as part of its diesel emissions settlement worth NZ$22.7 billion to date, Reuters reports. VW’s dealers will receive an average of $2.5 million each over 18 months, under the settlement which was first announced in principle in August. Volkswagen won’t sell any US diesel vehicles for the 2016 and 2017 models. The company says it is uncertain whether it will ever sell diesel vehicles in the US again. As part of the settlement, the company will continue making incentive payments to dealers, buy back diesel vehicles that dealers can’t sell and put the capital improvements it wanted dealers to make on hold for two years. A federal judge must still approve the settlement. Separately, the US Justice Department, Federal Trade Commission and lawyers for owners of 475,000 polluting diesel cars filed legal papers last week, asking a federal judge to give final approval to buy-back offers and diesel remediation efforts. This will be heard in court on 18 October. Volkswagen still faces billions of dollars in potential civil and potential criminal US fines for violating emissions laws, as well as a possible costly buy-back of 85,000 vehicles equipped with 3.0-litre diesel engines if it can't convince regulators they can be fixed. The Justice Department says, in a court filing, that regulators are still working on “a technical solution” to reduce emissions from these vehicles. Volkswagen has held talks with the Justice Department in recent months about settling the criminal investigation, Reuters reports. “The United States will continue to vigorously pursue its claims for civil penalties to fully hold (Volkswagen) accountable,” the Justice Department says. VW admitted installing improper software that deactivated pollution controls on more than 11 million diesel vehicles sold worldwide. In June, VW agreed buy back 475,000 US vehicles equipped with 2.0-litre engines, at a cost of up to NZ$13.8 billion, or offer fixes if regulators approve. To date, about 311,000 owners have already registered to take part in the settlement and only about 3300 owners have opted out. VW also agreed to spend up to NZ$7.3 billion to address claims by federal regulators and 44 US states. It will provide NZ$2.8 billion over 10 years to fund programmes to promote the building of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum. It will also put up NZ$3.7 billion over three years to enable government and tribal agencies to replace old buses or to fund infrastructure to reduce diesel emissions, and award states about NZ$800 million.