Volkswagen wants to buy back the 500,000 or so diesel cars that it programmed to cheat on US emissions test, or repair them and compensate owners for their trouble.
Under a plan that Reuters says VW is expected to present to a federal judge on Thursday, the German automaker will offer a cash payment to owners who return their cars, or make the modifications needed to ensure the cars meet emissions standards. Anyone who opts to sell back a car will be compensated for the value of the car before the scandal came to light in September, plus an unspecified bonus.
VW representatives did not immediately respond to a request for comment.
Between 2008 and 2015, Volkswagen sold 11 million cars containing software that detected when they were being tested for emissions compliance, and changed the engine settings to meet standards. The rest of the time, the cars went about spewing up to 40 times the legal limit of nitrogen oxides (NOx), which is linked to asthma and other respiratory problems.
It remains to be seen how VW will repair any vehicles that customers aren't willing to unload, but the known options aren't tantalizing. VW could tweak the software so the car delivers the emissions recorded during testing, but that would hurt fuel economy and performance. It could add a urea tank to the car, effectively eliminating NOx emissions. Doing so is expensive, though, and raises the question of where VW would install the necessary hardware.
It may be a "very costly solution, particularly given how much the company has already lost in terms of market value and sales," says Kelley Blue Book analyst Karl Brauer, but it's "a necessary part of the process and, as painful as it may be, VW has to address this issue before it can move forward.”
VW's will feel pain in other ways. The DOJ plans to sue the company for violating the Clean Air Act, and the FTC is suing for false advertising. Customers and dealers have filed dozens of lawsuits. Civil fines could reach nearly $20 billion, and criminal prosecutions are a very real possibility. US sales have plummeted—down 15 percent in January, 9.1 percent in December, and 25 percent in November, according to Bloomberg.
Oh, and that's just in the US—VW sold these cars just about everywhere. It's impossible to know how much years of deception will cost the company, but one Credit Suisse report put its estimate at $86 billion. Eight months into the largest scandal in automotive history, the pain is just starting to sink in.
