Volkswagen made enough progress on plans to remove or fix its emissions-cheating diesel-powered vehicles in the U.S. to gain a month-long extension on the deadline for a resolution from the judge overseeing the lawsuit against the maker by the Justice Department.
Senior U.S. District Court Judge Charles Breyer gave the German automaker until April 21 to provide him with the timing of the solution as well as potential payments to owners.
“I would hope by the 21st that as many astounding issues as possible will be wrapped up,” he said.
Breyer appointed former FBI Director Robert Mueller to supervise VW’s settlement talks with the Justice Department. He noted that Mueller informed him the automaker is making substantial progress toward a resolution that would get the polluting cars off the road.
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However, he added, there hasn’t been a final resolution because engineering technicalities and other issues still needed to be fixed, Breyer said Mueller told him. About 600,000 vehicles are impacted by the lawsuit.
“A delayed deadline hints that this fix is complex,” said Akshay Anand, analyst at Kelley Blue Book. “Regardless, Volkswagen needs a fix and time is of the essence. The longer it takes, the more the brand is damaged by the day.”
Part of the rumored settlement involves VW buying back the affected vehicles. According to Kelley Blue Book, based on KBB private party values as of Sept. 24, if VW were to buy back vehicles, it could cost as much as $7.3 billion. Below would be the estimated cost of U.S. vehicles, if it’s based on the generation of the engine.
Generation 1: $4.4 billion
- 2009-2014 VW Jetta Sedan and Jetta SportWagen TDI
- 2010-2014 Golf TDI
- 2012-2014 Beetle TDI
Generation 2: $1.6 billion
- 2012-2014 VW Passat TDI
Generation 3: $1.3 billion
- 2015 Jetta TDI
- 2015 Golf TDI and SportWagen
- 2015 Passat TDI
- 2015 Beetle TDI
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VW has already offered U.S. owners $1,000 in concessions. And it recently hired well-known specialist Kenneth Feinberg to oversee a compensation program. But the maker is also facing more than 500 lawsuits that could expand that payout. The U.S. Justice Department is seeking as much as $40 billion in fines as part of its own civil lawsuit.
Earlier this month, VWAG CEO Matthias Mueller warned the scandal could result in “substantial and painful” financial damage.
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The maker has already set aside more than $7 billion and lined up $20 billion more from a consortium of European banks to handle some of the potential costs. It’s also examining the possibility of shedding some of its assets to marshal even more financial resources, including its lucrative heavy truck business.