Volkswagen Expected To Pay Another $1 Billion For Emissions Scandal

Jan 04, 2017 06:20 AM EST | Jeroah Sabado

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Volkswagen is facing a new lawsuit in Germany in a new attempt to make the carmaker buy back millions of vehicles that used software to cheat diesel emissions tests. Germany claimed that the company needs to repurchase the cars at the full original purchase price due to the emissions scandal.

Volkswagen has agreed to a $1 Billion settlement to fix or buy back 80,000 diesel vehicles sold in the US. The German carmaker took new steps to put its emissions cheating scandal behind it. The settlement covers luxury Volkswagen, Audi and Porsche cars with 3.0-litre engines. It was announced after last-minute negotiations, which eventually forced a judge in California to reschedule the hearings several times.

Although the automaker and lawyers of the car owners were still negotiating the exact terms, owners of 3.0-litre engine vehicles would receive compensation from Volkswagen to get their vehicles repaired. Judge Charles R. Breyer of United States District Court in California, who is taking the case, said that the compensation would be "substantial."

The latest agreement was brought by federal and California regulators against Volkswagen. The world's second largest automaker still faces the possibility of spending billions of dollars more to resolve the criminal investigation and federal and state environmental claims. 

Volkswagen argues that its actions were not illegal in Europe and consumers are not entitled to any compensation under European law. Last month, Germany's federal motor transport authority gave Volkswagen the go signal to repair the cars by modifying their engines to be compliant with the law.

The Volkswagen emissions scandal previously led Germany to order a European-wide recall for 8.5 million vehicles. In June, Volkswagen reached a $15 Billion settlement to compensate owners of 475,000 diesel-powered vehicles with 2.0-litre engines that violate U.S. emissions laws.

Volkswagen is now on the process of eliminating the illegal software that cheats emissions tests and reassures owners that the technical fixes will not inflict loss of value on vehicles. Volkswagen hopes to complete repairs to all affected vehicles by the end of 2017.

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