Judge approves VW's record US emissions settlement

VW logo Image copyright Reuters

A US judge has approved the record $14.7bn (£12bn) settlement Volkswagen will pay in the country over its diesel emissions scandal.

Under the settlement, the German carmaker agreed to spend up to $10bn on buybacks and owner compensation.

An additional $4.7bn is to go to programs to offset excess emissions and to clean car projects.

The deal was agreed in June after regulators discovered VW software designed to cheat emissions tests.

Vehicle owners will be able to choose between having their car bought back at pre-scandal "trade in" value or having VW repairing the cars if regulators approve the fixes.

They will also receive an additional compensation of between $5,000 and $10,000 depending on how old their vehicles are.

The US judge turned down objections from owners who thought the compensation should have been higher, saying the agreement was "adequate and fair".

Image copyright AFP
Image caption The cheating software detected when emissions test we being done

Part of the fines will see the world's second biggest carmaker fund programs towards a better charging infrastructure for electric cars, the development of zero-emission ride-sharing fleets and general efforts to boost sales of emissions-friendly cars.

Over the next three years, the automaker will also pay to fund infrastructure on Native American tribal land to reduce diesel emissions.

Caught cheating

Volkswagen installed software in diesel cars sold worldwide to detect when they were being tested so the cars could cheat the results.

Some models could have been pumping out up to 40 times the legal limit of the pollutant, nitrogen oxide, regulators disclosed.

The carmaker said that around 11 million cars were affected worldwide.

The scandal has pulled down VW's global business, damaged its reputation and led to the ouster of chief executive Martin Winterkorn.

Volkswagen also still faces a flurry of fines and lawsuits outside of the US expected to the add to the overall bill the company will have to pay for the scandal.

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