The deal — to pay $4.3 billion in criminal and civil penalties to settle a U.S. probe into the rigging of diesel-powered cars to cheat emissions tests — raises the cost of the scandal to more than $23 billion in the U.S. and Canada.
Volkswagen is closing in on a deal to pay $4.3 billion in criminal and civil penalties to settle a U.S. probe into the rigging of diesel-powered cars to cheat emissions tests.
The agreement, which VW said Tuesday will include a guilty plea, raises the cost of the scandal to more than $23 billion in the U.S. and Canada, blowing by the 18.2 billion euros ($19.2 billion) the carmaker had set aside to resolve the disputes.
The accord would resolve one of the last big obstacles in the U.S. before the Jan. 20 inauguration of President-elect Donald Trump. That will allow the carmaker to begin rebuilding its reputation and focus on plans for clean-energy vehicles.
“This is good news,” said Arndt Ellinghorst of investment-research firm Evercore ISI. “The most important news is that VW managed to come to an agreement that allows the company to move on from here. It’s a major relief that this doesn’t get dragged into the new U.S. administration.”
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The draft settlement also calls for strengthening compliance systems and installing an independent monitor for three years, the Wolfsburg, Germany-based automaker said Tuesday in a statement. VW’s supervisory board plans to meet Wednesday to review the agreement, people familiar with the matter said.
The Justice Department declined to comment on Volkswagen’s statement. A final agreement must be approved by U.S. courts.
U.S. authorities in 2015 uncovered the carmaker’s efforts to deliberately cheat on emissions tests on diesel vehicles. The rigged engines were ultimately installed in 11 million vehicles worldwide, and cost former Chief Executive Martin Winterkorn his job.
VW still faces investor lawsuits in the U.S. and in Germany, as well as consumer lawsuits and a criminal probe in Germany. The company didn’t say in its statement whether additional individuals would be charged or plead guilty.
At least one employee is facing charges in the U.S. and another has already pleaded guilty related to the scheme.
Oliver Schmidt, the company’s liaison with U.S. environmental regulators, was arrested Saturday in Florida and is scheduled to appear in court there again Thursday.
VW engineer James Liang pleaded guilty in September in Detroit federal court to conspiring to defraud U.S. regulators and consumers.
Volkswagen’s shareholders have suffered since the scandal began in September 2015, with shares down more than 10 percent. The Justice Department was said to have taken into consideration how much the carmaker could afford to pay in calculating its penalty.
Ironically, despite spending 2016 embroiled in the emissions scandal, Volkswagen stands a decent chance to pass Toyota for the title of world’s biggest carmaker for the year.
Booming business in China helped Volkswagen increase its sales 3.8 percent to 10.31 million vehicles last year across all its brands — which include Audi, Porsche and Skoda — the company said Tuesday.