The department of Justice and Volkswagen today announced that they had agreed to a settlement that could amount to up to $14.7 billion. The settlement will be presented to Judge Charles R Breyer who will decide on whether or not to approve the agreement in the coming months.

The agreement includes a maximum of $10.033 billion for buybacks for the 475,000 2.0L diesels from model years 2009-2015 in use in the USA. It also includes a $2.7 billion environmental trust and an investment of $2 billion in brand-neutral zero emissions vehicle initiatives.

Volkswagen will offer to buy back TDI vehicles at their pre-September-2015 (when the scandal broke) values and will, according to an Automotive News report , also offer between $5,000 and $10,000 as compensation. After/if the agreement gets preliminary then final approval from Judge Breyer—which isn’t expected to happen until October—the buybacks will begin.

If Volkswagen can come up with a way to repair the vehicles that is approved by regulators, then TDI owners can also opt to have their vehicles repaired instead of bought back. According to Administrator Gina McCarthy of the EPA who spoke at today’s DOJ  press conference, a determination of whether or not a fix is even possible will come in the next six months, and TDI owners will have until about May 2018 to make a decision about what they’d like to do with their cars.


Under the agreement, VW is also required to create a $2.7 billion environmental trust that will aim to replace aging diesel fleets, much like the Diesel Emission Reduction Program. A minimum of $6.5 million will go to every state as part of the agreement.

Finally, Volkswagen will invest $2 billion over the next ten years in zero emission vehicle education, infrastructure, and improving access to the vehicles.

“We take our commitment to make things right very seriously and believe these agreements are a significant step forward,” says Matthias Müller, CEO of Volkswagen AG, in a press release. “We appreciate the constructive engagement of all the parties, and are very grateful to our customers for their continued patience as the settlement approval process moves ahead. We know that we still have a great deal of work to do to earn back the trust of the American people. We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.”

Audi Q2

Despite the size of the agreement, the largest ever of its kind, it still falls within the EUR 16.2 billion ($18 billion) exceptional charge that VW announced in its 2015 financial statements, and so the  company is able to cover the cost of it.

This is not the end of the road for Volkswagen, though. This agreement covers neither 3.0L vehicles, such as the Touareg and the Porsche Cayenne, nor does it cover criminal investigations that the Department of Justice says are underway.

The Group isn’t out of the woods yet, but this is an important first step in the way forward for both Volkswagen and TDI owners.