Emission scandal: Volkswagen set to sign off on a $4.3-billion US penalty settlement

WASHINGTON: Volkswagen AG’s supervisory board is set to sign off on a $4.3 billion settlement of US criminal and civil penalties for rigging diesel-powered cars to cheat on emissions tests, the latest step in the carmaker’s effort to resolve the scandal.

The agreement with the US Department of Justice and customs authorities will include a guilty plea, Wolfsburg, Germany-based VW said on Tuesday. The board plans to meet Wednesday to review the agreement.

The accord raises the cost of settlements in the scandal so far to more than $23 billion in the US and Canada, blowing through the 18.2 billion euros ($19.2 billion) the carmaker had set aside to resolve the disputes. At the same time, it would remove one of the last big regulatory obstacles for Volkswagen before the January 20 inauguration of Donald Trump as US president, enabling the carmaker to begin rebuilding its reputation in the country and focus on plans for clean-energy vehicles.


“Although the settlement is higher than reports had indicated, we view the resolution as a positive catalyst for Volkswagen since it removes the final known major liability” from the diesel scandal, even with other legal issues pending, analysts at Goldman Sachs, including Stefan Burgstaller in London, said in a report to clients.

US courts must still approve the settlement. VW also is involved in investor lawsuits in the US and in Germany related to how the emissions-test rigging affected the stock price, as well as consumer lawsuits and a criminal probe in Germany. Bloomberg