The $15.3 Billion Disaster

In late June, the VW Emissions scandal reached a settlement: $15.3 billion will exit VW’s coffers and into the pockets of drivers and states across the US.

Let’s have a little recap of the scandal before diving into the exact numbers of the settlement. Back in September of 2015, VW announced that it was messing with the software in their diesel cars to make them pass all of their emissions tests. They admitted to their wrongdoings right after some labs discovered the secret in tests.

Then, the US Justice Department, EPA, FTC, and a bunch of state governments demanded that there be restitution for the drivers and the states that had to deal with the impacts of harsh emissions. A bunch of lawyers also chimed in on behalf of individuals to make sure that the drivers would be compensated.

See, the big problem was that all of the 475,000 cars couldn’t just be sold. No one wanted a car that pumped out 40 times more than the nitrogen oxide minimum. So, owners were in a very troubling position and many felt that it would be irresponsible to drive their car again.

That is why $10.033 billion is dedicated to just fixing and buying back cars. VW said that owners will have until 2018 to decide to fix or sell and they hope they could save some money by encouraging owners to choose to fix. Ridiculous!

VW will buy back the cars at a price that still accounts for depreciation, but doesn’t factor in the drop after the scandal. Owners also get anywhere from $5,100 to $10,000 to make the deal a little sweeter.

Another $600 million goes to states that demanded more fines to be paid, such as the District of Columbia and Puerto Rico.

But, there’s more! Over the span of 10 years, VW will be required to invest $2 billion into electric car companies and charging infrastructure companies. These companies are hand selected by the EPA and California to make sure that there is no other shady business. $2.7 billion will go to states so they can swap out their polar cap shrinking diesel bus fleet and to overall reduce the footprint of diesel vehicles.

Overall, it puts VW in their place and allows governing bodies and drivers to relax. VW already set aside $18 billion when the scandal broke, so their shouldn’t be any problems. But do expect a slowdown in new, novel cars.