Under the deal, VW will spend about $10 billion to buy back affected cars, along with cash compensation for each car. The rest of the money will go to a $2.7 billion Environmental Protection Agency fund to help offset the environmental damages done by their vehicles and a $2 billion investment in cleaner vehicles.
Owners of affected cars could either take the buyout and extra cash, or get their vehicles fixed for free. The cars were equipped with cheat software that would recognize when the vehicle was being tested and alter the vehicle’s emission controls so that it would pass the EPA test. In normal driving, the car would produce much higher emissions than allowed.
VW has set aside about $18 billion to cover the costs of the scandal, and even though this first hurdle is complete, there is still a long road ahead for the company. It will be settling cases in 42 states and Puerto Rico for about $500 million, plus it faces possible legal issues in other countries like Germany and South Korea.
The settlement only includes cars equipped with a 2.0-liter four-cylinder turbo diesel, known internally as the EA189 engine. Another issue regarding cheat software in VW, Porsche and Audi vehicles using a 3.0-liter V-6 engines still needs to be settled.
Also, there are roughly 11 million vehicles with the cheat software, mostly in Europe, and the U.S. settlement only covers 475,000 cars.
TFLcar took an affected Volkswagen Jetta diesel and put in on a dyno to see how much power it loses in cheat mode. Check out the full video below: