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U.S. Judge Approves Volkswagen $1.2 Billion Settlement

Volkswagen AG’s (VOWG_p.DE) dealers will receive an average of $1.85 million in a $1.2 billion settlement approved by a U.S. judge on Monday over its diesel emissions scandal.

Details of the Volkswagen Emission Settlement

According to Yahoo News, U.S. District Judge Charles Breyer said the 650 U.S. dealers would be paid over a period of 18 months and that the ruling of the settlement was “fair, reasonable, and adequate.”

VW also agreed to keep making volume-based incentive payments to dealers and will allow them to defer capital improvements for two years.

In total, VW agreed to spend upwards of $22 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers stemming from the excess vehicle emissions.

About the Volkswagen Emission Scandal

Back in September 2015, VW had installed secret software in its diesel cars to cheat the dealers on exhaust emissions tests and trick them into believing that they were cleaner in testing than they really were.

The vehicles actually emitted up to 40 times the legally allowable pollution levels and scandal ruined the brand’s reputation and led to a dramatic decrease in sales. The value of the settlement itself is worth a total of more than $1.6 billion for the VW brand dealers.

The settlement includes $270 million through a provision for prior payments and $175 million in the continued sales incentives.

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