A U.S. federal judge has authorized Volkswagen AG to pay a record-setting $14.7 billion to resolve the largest auto-scandal settlement in U.S. history
U.S. District Judge Charles Breyer in the northwestern city of San Francisco, California signed an order Tuesday that allows the owners of about 475,000 Volkswagens and Audis with 2-liter four-cylinder diesel engines to seek buybacks of their vehicles starting next Tuesday.
The agreement, which Judge Breyer described as "fair, reasonable and adequate," is the latest development in a scandal that surfaced when Volkswagen admitted in September 2015 it cheated to make exhaust emissions tests appear cleaner than they really were.
The settlement requires the German automaker to spend up to $10 billion on the vehicle buybacks and owner compensation. Volkswagen must spend another $4.7 billion on programs to offset excess emissions and other clean vehicle projects.
Emissions from the affected vehicles are up to 40 times above the legal pollution limits.
If regulators approve plans to repair the vehicles, Volkswagen may also be allowed to fix them.
To date, Volkswagen has agreed to spend up to $16.5 billion to put the scandal behind. This includes payments to auto dealers, U.S. states, and attorneys for the owners of the affected vehicles.
The world's second-largest automaker still faces billions of dollars in additional costs to address 85,000 faulty 3.0 liter vehicles and to cover federal fines for violating the country's clean air laws.
Volkswagen is also the target of lawsuits in 16 U.S. states for additional claims that could also hike the company's overall costs.
The scandal has hurt the automaker's global business and forced the ouster of its CEO.