Since the startling reveal of its falsified emission reports last September, Volkswagen has wanted to put the entire issue behind it for good. While Volkswagen will have to deal with the public relations damage for many years to come, its first order of business is with the many governments that it now owes money too. VW’s first payoff is to the U.S. According to several credible reports, the price to settle the many lawsuits against VW in the U.S. total to over $15 billion, with $10 billion going to VW owners and another $5 billion in fines.
The first amount of $10 billion will go to covering the cost of buying back vehicles at pre-Dieselgate values from the many unknowing customers pre-September 2015. Owners will also be compensated by as much as $10,000 per car just for their troubles. But Volkswagen has a certain deadline to meet for these fines, and if they miss any of them, they could increase even further. VW will also be paying the Environmental Protection Agency and California Air Resources Board $2.7 billion in fines, with $2 billion of it going towards clean-emissions technology.
Volkswagen also has to deal with several state-specific lawsuits, like its settlement with New York that will cost them another $400 million. While its share price did increase 2.6% the other day in Frankfurt, it will be interesting to see how VW manages to liquidate enough assets to pay off all these pricey settlements. Investors in both U.S. and Germany are suing VW for misleading them and the resulting mass losses in the few days leading up to Dieselgate’s reveal last September. The situation seems even more dire when considering the fact that last week, several South Korean prosecutors arrested a VW executive as part of the country’s investigation into the scandal. It’s going to be tough for VW to get itself out of this one.