Volkswagen plans to pay more than $10 billion to settle the scandal over excessive diesel emissions with U.S. authorities, according to multiple reports.
The settlement would, in part, compensate nearly half a million U.S. VW owners whose vehicles can emit up to 40 times the federal threshold of nitrogen oxides. In total, about 11 million vehicles worldwide were equipped with software to manipulate emissions levels during official testing.
VW plans to buy back the vehicles or, once a fix is approved, pay to alter the cars to comply with environmental standards. Owners will also be eligible for additional compensation with an average value of about $5,000.
The Wall Street Journal reported that about $4 billion of the settlement will be used to offset pollution from those vehicles, as well as increase the automaker's production of zero-emission models.
Terms could still change as attorneys hash out final details; a federal judge is expected to announce the deal early next week.
Volkswagen's final price tag, however, will likely exceed the $10 billion settlement. A source told Reuters that some environmental remediation costs were not factored into the initial total.
The settlement also excludes some 80,000 diesel vehicles equipped with larger 3.0-liter engines as well as potential civil penalties for violations of the Clean Air Act.
Volkswagen originally set aside $7 billion to cover costs from the scandal, which was announced by the Environmental Protection Agency last year, but raised that amount to more than $18 billion in April.
A recall is already underway in Europe, where most of the vehicles are located, but the U.S. settlement only inches VW closer to resolving the issue. A plan to recall the U.S. vehicles will be much more complicated that the fix implemented in Europe, and the automaker continues to face criminal probes, including in the U.S. and its native Germany.
German prosecutors announced this week that they are investigating former CEO Martin Winterkorn and a member company's management board for possible violations of securities laws.
