The US Environmental Protection Agency and the California Air Resources Board said on Tuesday that they have come up with a regulatory fix to the diesel emissions scandal that has plagued Volkswagen. The solution involves disassembling the software that allowed the car maker to defeat the rules and to replace that with hardware that can prevent it going forward. The remedy involves about three-quarters of the 3.0 liter diesels. The remaining cars could get regulatory approval soon. VW said it was pleased because the alternative would have forced it to buy back the cars with which the car company had tampered. The total cost for that would have been $4 billion.
The defeat device was meant to cheat state and federal emission tests and resulted in nitrogen oxide emissions that were up to 40 times higher than allowed for each of the approximately 85,000 vehicles in California, according to the California Air Resources Board.
The settlement: VW agreed to spend $1.22 billion to either fix or buy back nearly 80,000 vehicles with 3.0 liter engines, according to a Reuters report. For customers who chose to have their cars fixed, the car maker agreed to pay them anywhere between $8,500 and $17,000.
To this point, VW has paid about $25 billion to address claims from customers, regulators and dealers. The car maker pled guilty earlier this year to three felonies and it received probation.
In September 2015, VW admitted to fixing about 11 million diesel vehicles around the globe with software devices that could rig the emissions results. It’s the biggest scandal in North America’s history news reports have said.
But its problems are not limited to North America, where it still faces civil lawsuits from investors and others. They also extend to Germany, where criminal proceedings are expected to take place.
In August, Oliver Schmidt had pleaded guilty to violating the Clean Air Act and conspiring to defraud the US government for his role in "Dieselgate." He received 7 years in prison and a $400,000 fine. He could have gotten 169 years in prison, Reuters said. Former engineer James Liang was also sentenced in August to 40 months in prison and a $200,000 fine.
Six others have been charged.
The episode has its roots in 2006, when the car maker is alleged to have tried to fool U.S. regulators into the thinking its clean diesel engines could meet federal emissions standards. It then used those claims to sell more vehicles to unsuspecting buyers, who thought their cars to be cleaner than others on the market.
“What Volkswagen did was categorically unacceptable,” said California Attorney General Xavier Becerra. “At the California Department of Justice, we’ve been holding Volkswagen accountable since we learned of their inexcusable actions. One thing should be crystal clear: wrongdoers who believe they can run and hide are sorely mistaken.”
“When VW couldn’t design an engine that met the new standards, company executives authorized the creation of a so-called defeat device — software that detected when the vehicle was undergoing testing and switched to more effective emissions controls,” U.S. prosecutors added.
Volkswagen's ill-conceived plan started to unravel in 2014 when West Virginia University professors detected that the emissions results didn’t match up with the claims.
