Lawsuits in U.S. said to cost VW $16.5 billion

Volkswagen’s agreement to pay 652 U.S. auto dealerships for losses caused by its diesel-cheating scheme will cost the carmaker about $1.2 billion, a person familiar with the matter said.

That will raise VW’s settlements to resolve U.S. lawsuits that include those by car owners and regulators to $16.5 billion, with the automaker still facing investor claims and possible criminal charges.

Under the deal announced in court Thursday, VW will buy back unfixable used vehicles under the same terms as those given consumers and independent dealers, lawyers for the dealerships said in a statement without disclosing the dollar value of the tentative settlement. VW said in a separate statement that it agreed to make cash payments and provide additional benefits to the dealers to resolve their claims.

The settlement removes one headache for the carmaker as it seeks to repair its reputation after the scandal tarred its image. Almost a year after VW’s rigging of diesel-powered vehicles to cheat emissions tests was made public, it still doesn’t have an approved fix for any of the 562,000 cars still polluting U.S. roads.

VW reached a $14.7 billion agreement with car owners and U.S. and California regulators that calls for buying back or fixing 480,000 Volkswagens with 2.0-liter engines. The company is also on the hook for $603 million it agreed to pay 44 states, and it faces more state government claims and investor class actions in the United States, lawsuits in Germany and Korea and possible criminal penalties in all three countries.

U.S. District Judge Charles Breyer, who last month gave preliminary approval to the carmaker’s settlement covering the 2-liter models, pressed on Thursday for a solution for vehicles with 3.0-liter engines. Those models include the Volkswagen Touareg, Porsche Cayenne and Audi Q5.

Weeks after VW admitted to rigging the smaller diesel engines, U.S. regulators alleged the 3-liter engines also contained a so-called defeat device. VW, which initially rejected the allegations, submitted a recall plan for them in February.

Breyer ordered the company to file a plan for fixing the 3-liter engines and proof that it works to U.S. regulators by Oct. 24 and report back to him on Nov. 3. “We have a pretty good idea how it’s going to end, but not sure how it will get there,” Breyer said in San Francisco federal court, referring to the goal of getting the cars off the road. Bloomberg