Volkswagen will reportedly pay over $10 billion to settle claims of almost half a million owners following the diesel emissions cheating scandal in the United States. Sources who are familiar with the agreement shared on June 23, Thursday that the funds paid by the German automaker will also be used to help battle US air pollution.
The total value of the deal is reportedly $10.3 billion. That is based on documents that summarize some of the settlements with the US government and VW customers.
However, one source reported that the total does not include environmental costs. That will increase the settlement's grand total.
One source that was briefed on the talks reported that each VW car owner will get an average of $5,000 in compensation. They will also receive an estimated value of the diesel vehicles before the scandal started in September 2015, according to Reuters.
VW customers can also receive money if they choose to get the vehicles repaired to remove items including unscrupulous on-board software. However, that will be based on whether US regulators later approve the repairs.
In addition, Volkswagen will help to promote zero-emissions vehicles and launch a program to remove high diesel emissions from vehicles.
Last year VW admitted that it had used cheating software to avoid emissions requirements of almost 11 million vehicles around the world.In addition, the company also deceived the US Environmental Protection Agency (EPA) after it started asking questions about emissions test results in 2014.
The EPA, California Air Resources Board (CARB), and US Justice Department have been working out the details of the VW settlement for weeks. VW probably will be unable to resell vehicles from the buy-back program unless it can prove to US regulators that the diesel cars can be fixed.
In April 2016 Volkswagen reported it will reserve $18.2 billion to pay for the "Dieselgate" scandal. That includes funds for buying back and fixing diesel vehicles.
In related news, some of Tesla's biggest investors have stated support for CEO Elon Musk's proposal to buy solar power company SolarCity, according to Reuters. This followed a sharp drop in the automaker's stock price.
Joe Dennison is a portfolio manager at Zevenbergen Capital Investments, which owns around 600,000 Tesla stock shares. He stated that it makes sense for the company to change transportation into a sustainable industry. Dennison believes that most investors that own Tesla stock understand Tesla's long-term vision.
Here's a video on the VW diesel cheating scandal: