Volkswagen AG and Volkswagen Group of America, Inc. (together, Volkswagen) announced today that they have reached an agreement with the United States Department of Justice (DOJ) on behalf of the Environmental Protection Agency (EPA) and the State of California, by and through the California Air Resources Board (CARB) and the California Attorney General, to resolve civil claims regarding approximately 83,000 affected 3.0L TDI V6 diesel engine vehicles in the United States.
The agreement, in the form of a proposed Consent Decree, is subject to the approval of Judge Charles R. Breyer of the United States District Court for the Northern District of California, who presides over federal Multidistrict Litigation (MDL) proceedings related to the diesel matter in the United States. The proposed agreement would allow Volkswagen to recall more than 75 percent of affected 3.0L TDI V6 vehicles to bring them into compliance with the emissions standards to which they were certified, if appropriate modifications are approved by EPA and CARB.
As disclosed by the Court, Volkswagen has also reached agreement with the Court-appointed Plaintiffs' Steering Committee (PSC) on substantial aspects of the monetary relief that eligible owners and lessees would receive, and the parties are working to resolve the remaining issues. Details of these discussions remain subject to a confidentiality order of the Court. The Court has scheduled a status conference on Thursday 22 December at 11am PT for the parties to report on progress towards a resolution and set a deadline of January 31, 2017 for the parties to submit a formal agreement to the Court.
"The agreement announced by the Court today between Volkswagen and U.S. environmental regulators is another important step forward in our efforts to make things right for our customers, and we support the efforts of the Court to bring about a fair and reasonable resolution of remaining 3.0L TDI V6 claims as quickly as possible," said Hinrich J. Woebcken, President and CEO of Volkswagen Group of America, Inc. "We are committed to earning back the trust of all our stakeholders and thank our customers and dealers in the United States for their patience as the process moves forward."
Under the terms of the proposed Consent Decree, Volkswagen has agreed to:
1. Recall approximately 63,000 affected 2013-2016 Model Year Volkswagen, Audi and Porsche 3.0L TDI V6 vehicles with so-called Generation 2 engines to bring them into compliance with the emissions standards to which they were certified, if appropriate modifications are approved by EPA and CARB. If Volkswagen is unable to meet this requirement, it will offer to buy back or terminate the leases of these vehicles and may also seek approval by EPA and CARB to offer customers a modification to substantially reduce their nitrogen oxide (NOx) emissions.
2. Buy back or terminate the leases of approximately 20,000 affected 2009-2012 Model Year Volkswagen and Audi 3.0L TDI V6 vehicles with so-called Generation 1 engines or, if approved by EPA and CARB, modify the vehicles to substantially reduce their NOx emissions so as to allow eligible owners and lessees to keep them.
3. Contribute $225 million to the environmental remediation trust that is being established under Volkswagen's 2.0L TDI settlements in the United States to fully mitigate the lifetime NOx emissions of the affected 3.0L TDI V6 vehicles.
4. As part of its agreement with the State of California, Volkswagen will also pay $25 million to CARB to support the use of zero emissions vehicles (ZEVs) in the State.
The terms of the proposed agreement will be effective and final only after approval by the Court. At the earliest, approval will occur during spring of 2017. Affected 3.0L TDI V6 customers do not need to take any action at this time, and can visit www.VWCourtSettlement.com for more information.
By its terms, the proposed Consent Decree announced today is not intended to apply to or affect Volkswagen's obligations under the laws or regulations of any jurisdiction outside the United States. Regulations governing NOx emissions limits for vehicles in the United States are much stricter than those in other parts of the world and the engine variants also differ significantly. This makes the development of technical solutions in the United States more challenging than in Europe and other parts of the world, where implementation of an approved program to modify TDI vehicles to comply fully with UN/ECE and European emissions standards has already begun by agreement with the relevant authorities.
NOTES TO EDITORS:
Volkswagen in the United States
Volkswagen Group of America (VWGoA), a wholly owned subsidiary of Volkswagen AG, employs more than 6,000 people in the United States and supports more than 1,000 dealer locations in all 50 states. Volkswagen has more than 60 years of history in the United States, where VWGoA maintains more than 30 U.S. locations including a LEED Platinum-certified manufacturing facility in Chattanooga, Tennessee.
The Chattanooga facility employs more than 2,500 people and supports suppliers who provide some 9,200 jobs. The facility produces the Volkswagen Passat and has recently expanded to accommodate production of a new, seven-passenger midsize SUV, the Volkswagen Atlas. Volkswagen is investing $900 million to expand its U.S. manufacturing footprint through production of the new SUV as part of Volkswagen AG's plan to invest more than $7 billion in North America from 2015 through 2019.
The Multi-District Litigation (MDL)
The case is known as In Re: Volkswagen "Clean Diesel" Marketing, Sales Practices and Products Liability Litigation, MDL 15-2672, in United States District Court for the Northern District of California in San Francisco before Judge Charles R. Breyer.
The proposed Consent Decree was executed by Volkswagen AG, Volkswagen Group of America, Inc., Volkswagen Group of America Chattanooga Operations, LLC, Audi AG, Dr. Ing. h.c. F. Porsche AG and Porsche Cars North America, Inc. It includes the following 3.0L TDI V6 engine vehicles:
On October 25, Volkswagen obtained final Court approval for a 2.0L TDI Settlement Program to resolve civil claims related to approximately 475,000 eligible Volkswagen and Audi 2.0L TDI vehicles in the United States. As part of that settlement program, Volkswagen will also pay $2.7 billion over three years into an environmental trust to remediate the total, lifetime excess nitrogen oxide (NOx) emissions from 2.0L TDI vehicles in the United States and invest $2.0 billion over 10 years in zero emissions vehicle (ZEV) infrastructure, access and awareness initiatives.
Volkswagen remains focused on resolving other outstanding legal issues related to the diesel matter in the United States.