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In 2015, it was discovered that Volkswagen had been cheating consumers and regulators worldwide when it came to the emissions testing of their Turbo Diesel Injected (TDI) engines. The aftermath of the discovery led to mass recalls, several lawsuits, negative PR, and worldwide controversy.
The most recent settlement for $1.2 billion, which is set to be approved by a federal judge, means that all affected US consumers who purchased or leased vehicles with the TDI 3.0L engine will be compensated as a result of the deception. In addition to VW being required to repair these vehicles to bring them into compliance with existing emissions standards, owners and lessees will be entitled to compensation for being defrauded. The per consumer compensation being awarded by this settlement can range from $5,000 to $7,500 or more. Additionally, lease holders will be entitled to terminate their leases without paying a cancellation penalty.
Details of the Deception
For many years, Volkswagen led the auto industry when it came to the supposedly TDI "clean diesel" technology. However, the technology didn't work exactly as advertised. Rather than actually producing fewer emissions, vehicles were equipped with "defeat devices" designed to fool emissions tests.
Sadly, consumers who believed they were buying more environmentally-friendly vehicles were actually buying cars that produced above-average carbon emissions.
Details of the Settlement
This particular settlement applies to vehicles that had the VW 3.0L TDI engines. Surprisingly, only one VW branded vehicle, the Touareg, is included in the settlement. However, the Audi Q5, Q7, A6, A7, and A8 models, along with the Porsche Cayenne, are also included in the settlement, as these vehicles all used the VW TDI 3.0L engine. Other VW vehicle owners affected by the TDI controversy are likely covered under the other separate settlements, one of which included over $14 billion in relief.
If VW can bring the cars into compliance within the time frame provided by the court, then the total payout for this particular action will total approximately $1.2 billion. However, if VW is unable to meet the repair deadlines, the company could end up paying close to $4 billion in additional fines and penalties.