The California Air Resources Board (CARB) is extending a deadline to approve or reject Volkswagen's proposed fix for the EA 189 diesel-engined cars, Reuters reports. The agency pushed the deadline back to Jan. 14 to evaluate the solution which VW submitted on Nov. 20.

The extension by CARB came after the automaker provided "additional significant information and data" during the week of Dec. 14, the agency stated in a letter that was made public.

CARB and the EPA are expected to make an announcement in January regarding the solutions proposed by Volkswagen for some 482,000 cars equipped with EA 189 engines, with several different measures expected to be unveiled for different models. It is expected that some models will require hardware and software updates, while other may require only a software fix.

Los Angeles • California regulators on Tuesday rejected Volkswagen's recall plan for some of the German automaker's most popular diesel models that used software to intentionally deceive government emissions tests, including the Beetle, Jetta, Golf and Passat.

The rejection doesn't rule out an eventual recall plan for owners of the 75,688 affected 2.0-liter diesel cars in California.

But it does prolong the limbo for drivers who bought the diesels under the false impression that they were getting a cleaner engine along with a more powerful car and better mileage and who have been waiting for a path forward since the scandal unfolded last September.

The action also leaves the possibility of a buyback for VW owners.

The California Air Resources Board said Volkswagen's plan was unacceptable for a variety of reasons, including:

• it did not adequately identify the affected vehicles;

• it did not include a sufficient method for obtaining the car owners' names and addresses; and

• it did not include adequate information on how the fix would affect future emissions results.

The state agency also issued a formal notice against the German automaker, alleging its deception and failure to propose a timely solution had violated the state's clean air regulations and "fundamentally undercut" efforts to protect residents from harmful pollutants.

That finding will likely mean future fines for VW as the investigation continues.

"VW's submissions are incomplete, substantially deficient and fall far short of meeting the legal requirements," Annette Herbert, head of the agency's emissions compliance, automotive regulations and science division wrote in a letter to VW executives.

The state agency is working to quantify the damage done by the excess nitrous oxide and particulates spewed into the air to help reach a resolution, said David Clegern, an agency spokesman.

"How many more people suffered asthma attacks? How many more people died early?" he said. "It's not just about vehicles, it's about public health and the environment as well."

The U.S. Environmental Protection Agency, which is also investigating VW, issued a statement saying it agreed with California regulators but was operating on a different timetable.

The rejection only applies to 2.0-liter diesel engines registered in California.

The cars covered include VW Jetta SportWagen (2009-2014); VW Beetle (2013-2015); VW Beetle Convertible (2013-2015); VW Golf (2010-2015); VW Jetta (2009-2015); VW Passat (2012-2015); VW Golf SportWagen (2015); and the VW-owned Audi A3 (2010-2013 and 2015).

A recall plan for 3.0-liter diesel engines, including some sold under the VW-owned Audi and Porsche brands, is due next month.

In a statement, VW said it was continuing to work with both state and federal regulators and the rejection of its recall plan Tuesday did not mean a recall would not occur.

A federal consumer watchdog sued Volkswagen on Tuesday, charging the company made false claims in commercials promoting its "Clean Diesel" vehicles as environmentally friendly.

The German automaker hastily pulled the ads following last year's admission it had installed illegal software on its diesel vehicles to cheat emissions tests. U.S. regulators say Volkswagen's engines spewed up to 40 times the allowed levels of air pollutants in real-world driving conditions.

The Federal Trade Commission alleges that Volkswagen deceived customers during a seven-year period by selling more than 550,000 diesel cars based on fraudulent claims made through a marketing campaign. That campaign included Super Bowl ads, online social media campaigns and print advertising targeted to "environmentally conscious" consumers.

"Hybrids? They're so last year," Volkswagen proclaimed in a mailer to customers promoting its 2009 Jetta TDI. "Now going green doesn't have to feel like you're going green."

The FTC's action is the latest blow to Volkswagen, which also faces more than $20 billion in potential fines for violating U.S. clean air regulations and hundreds of class action lawsuits filed on behalf of angry customers.
Tests were rigged

"For years Volkswagen's ads touted the company's 'Clean Diesel' cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests," said FTC Chairwoman Edith Ramirez. "Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen's deceptive and unfair practices."

In addition to the raft of civil litigation, the Justice Department and the Environmental Protection Agency is also weighing potential criminal charges against the company and senior executives.

Volkswagen Group of America spokeswoman Jeannine Ginivan said the company is reviewing the latest lawsuit and "continues to co-operate with all relevant U.S. regulators."

"Our most important priority is to find a solution to the diesel emissions matter and earn back the trust of our customers and dealers as we build a better company," Ginivan said.

Volkswagen has reached a deal in principle with U.S. regulators regarding the recall of diesel cars in the U.S., Reuters reports. The framework agreement comes just as VW will update U.S. District Court Judge Charles Breyer on progress in negotiations with the California Air Resources Board (CARB), the EPA and the Department of Justice.

The agreement will reportedly include an offer by VW to buy back 500,000 vehicles equipped with 2.0-liter diesel engines: the VW Golf, VW Jetta and Audi A3 models. The buyback option agreement will not apply to 80,000 Audi, Porsche and VW models equipped with the larger 3.0-liter TDI engines. The agreement will also include a compensation fund for owners of affected cars, though the specifics of the fund were not revealed to Reuters at this time. Under the agreement, VW may also offer to repair the affected cars -- this is expected to be up to the owners.

If owners elect to sell their cars back, they will receive an additional cash payment on top of the car's value, which is expected to be calculated based on vehicle values that existed before the diesel scandal broke in September of 2015. The option of selling a car back will reportedly be offered for a term of two years; the amount of time owners have to decide what they want to do, though the term isn't part of a formal agreement announced by the company and regulators as of this date.

The automaker is not expected to announce details of the deal with U.S. regulators in updating the court this week; lawyers for VW are only expected to update the court on the progress in the agreement talks in very general terms. Reuters adds that the details of the buy-back agreement could change as negotiations go forward.

At the moment it's unclear what VW will be allowed to do with the cars it buys back, specifically whether it will be allowed to repair them and sell them as used vehicles.

Volkswagen has also drastically increased the amount earmarked to deal with the diesel recall in the U.S. and a number of other markets, Reuters reports. The automaker set aside between 10 to 20 billion euros, with the lower estimate amounting to $11.3 billion, a source with knowledge of the matter told Reuters.

More details of the deal are expected to trickle out in the next several days, though the timing of VW's formal announcement to owners is not known. It is expected that a formal agreement will still take several weeks to hammer out. The formal agreement will then be ratified by the court after the parties present it for approval.

Company will pay diesel car owners at least $5,100 on top of buyback or fix

Volkswagen AG is nearing a $10 billion civil settlement, the largest in the auto industry’s history, to compensate U.S. owners of vehicles affected by the German car maker’s emissions-cheating scandal, said people familiar with the matter.

Under the proposed deal, Volkswagen would offer to buy back cars and provide additional compensation for owners of almost 500,000 diesel-powered vehicles with two-liter engines that contain software capable of duping government emissions tests, the people said.

In addition, Volkswagen is expected to pay more than $4 billion for environmental impacts and to promote so-called zero-emission vehicles, the people said. Volkswagen faces other government penalties in the U.S. and around the globe.

“If VW succeeds in settling the case, it will take a big step forward but have many more ahead of it,” said Erik Gordon, a professor at University of Michigan’s Ross School of Business. “The enormity of VW’s world-wide problems are hard to estimate but already are many times what management originally thought.”

Volkswagen is offering to either buy back vehicles at their market value before the scandal emerged in September or make affected vehicles compliant with environmental regulations. The car maker will also provide additional cash whether owners choose to sell or keep their cars, the people said.

Consumers could get at least $5,100 and some could receive up to $10,000, beyond the price of the buyback or repair, one of the people said. Cars affected include model year 2009 to 2015 Volkswagen Jettas, 2010 to 2015 Volkswagen Golfs, 2012 to 2015 Volkswagen Passats and Beetles, and 2010 to 2015 Audi A3s, all with diesel engines.

The settlement isn’t the first time a car maker has been forced to repurchase autos. Fiat Chrysler Automobiles NV last year agreed in certain instances to repurchase some trucks in a settlement with U.S. car-safety regulators covering recall lapses involving millions of vehicles.

“The consumer is finally getting their due, but it took a long time and lot of money,” said Steve Kalafer, a Volkswagen dealer in New Jersey. He said an earlier program that offered Volkswagen diesel-car owners $1,000 and a roadside emergency-service plan “was deferring reality.”

Mr. Kalafer said dealers are waiting for the company to comprehensively address their woes. Volkswagen halted sales of affected vehicles in the fall, leaving dealers with expensive inventory.
“It has been a nightmare for the retailers,” he said.

Stephanie Walkenshaw, who bought a diesel Jetta just over a year ago, plans to sell back her car and will be watching for any conditions attached to the payouts. The 38-year-old Denver resident has continued to drive the Jetta, which she purchased in part because she thought it was good for the environment. “I feel deceived and duped,” she said.

A Volkswagen spokeswoman declined to comment on Thursday. Bloomberg and the Associated Press earlier reported some details of the expected settlement.

The people cautioned that negotiations among Volkswagen, plaintiffs’ lawyers and government officials involved in widespread litigation consolidated in a San Francisco federal court were ongoing and terms of the settlement could change. U.S. Judge Charles Breyer, who is overseeing the litigation, set a June 28 deadline for the auto maker and other parties to reach a settlement to resolve the emissions lapses.

Elizabeth Cabraser, the lead plaintiffs’ lawyer representing U.S. consumers, said in a statement that the settlement, “will provide substantial benefits to both consumers and the environment—providing car owners and lessees fair value for their vehicles, while also removing environmentally-harmful vehicles from the road.”

The U.S. Justice Department sued Volkswagen in January on behalf of the Environmental Protection Agency, alleging the German car giant violated federal clean-air laws by using software known as defeat devices that allowed vehicles to pollute more on roadways than during government tests.

The Federal Trade Commission, which enforces U.S. consumer protection laws, also sued the auto maker in March alleging the company falsely advertised “clean diesel” vehicles with low emissions. Volkswagen also faces claims by consumers alleging declining resale values and other grievances.

The auto maker also faces litigation and investigations over similar allegations involving 85,000 diesel-powered autos with three-liter engines.

Volkswagen has acknowledged installing the problematic software on some 11 million vehicles world-wide. In the U.S., officials said Volkswagen diesel-powered vehicles emitted nitrogen oxides at up to 40 times the allowable standard.

Costs of the proposed deal raise the stakes for any future cases. Toyota Motor Corp. and General Motors Co. paid $1.2 billion and $900 million, respectively, to settle criminal charges stemming from earlier safety lapses.

Toyota was penalized for failing to report unintended acceleration issues while GM’s case arose from millions of older cars with faulty ignition switches that were tied to 124 deaths in accidents. GM overall has reached settlements with the U.S. Justice Department, shareholders and thousands of consumers totaling more than $2 billion. It still faces additional litigation and trials over a faulty switch that could shut off power to air bags and power brakes.Japanese air-bag supplier Takata Corp. has suffered fines and faces a criminal probe in the U.S. over defective air bags in tens of millions of vehicles that can rupture and spray shrapnel. Takata has said it is cooperating with government officials.

Volkswagen has set aside more than $18 billion to recall millions of vehicles and settle legal claims, and additional possible financial penalties still loom.

Its troubles come as other auto makers have admitted to misstating fuel economy or been accused of emissions lapses. Mitsubishi Motors Corp. this week forecast a $1.38 billion loss for the fiscal year ending March 2017 after admitting it misstated fuel-economy on vehicles in Japan.

The proposed U.S. settlement would mark a potential bookend for Volkswagen on the scandal. Some Volkswagen shareholders earlier this week berated executives at the company’s annual shareholders meeting in Germany over the company’s response to the emissions cheating, which U.S. environmental regulators disclosed in September. The German auto maker has repeatedly apologized for the scandal.

The Justice Department is separately conducting a criminal probe of Volkswagen over the emissions cheating. The auto maker decided against releasing initial findings of its own investigation in part because of concerns it could hurt any credit the company might receive from U.S. prosecutors for cooperating with the probe.

Volkswagen has been ordered to buy back any diesel 2.0-liter four-cylinder car in the United States as part of its unprecedented $14.7 billion settlement with federal regulators, U.S. Justice Department officials said this morning.The buyback order will include some 482,000 diesel Volkswagen and Audi cars sold between 2009 and 2015, officials said.

Owners will have the choice between selling their car back to VW, or getting the cars fixed at no cost. Owners with leases can choose to have their leases terminated at no cost. That fix has not been announced yet.

No matter what owners decide to do, they will also receive cash compensation from VW. Most owners will get between $5,100 and up to $10,000, officials said.

“By duping the regulators VW turned half a million American drivers into unwitting accomplices in an unprecedented assault on our environment,” Deputy U.S. Attorney General Sally Q. Yates said in a press conference.

The company has been ordered to set aside $10.03 billion for buybacks; $2 billion to invest in projects “that will encourage americans to expand use of zero emission vehicles in the future”, Yates said; and $2.7 billion to an environmental trust that will remedy NOx emissions from TDI cars. The settlement is part of the largest monetary obligation in the history of Clean Air Act, Yates said.

Yates said that this settlement is only the beginning, and does not cover the ongoing criminal investigation or penalties related to the 3.0-liter diesel V6 engine.Reuters reports that a separate settlement worth at least $600 million will also be announced later with states. Buybacks are expected to begin in October, with fixes rolled out by November.

In addition:VW cannot resell or export the vehicles bought back unless the U.S. Environmental Protection Agency approves a fix, the documents said. Volkswagen must repair or buy back 85 percent of the 475,000 vehicles by June 2019 or face penalties of $100 million for every percentage point it falls below that figure.Last year Volkswagen admitted to cheating NOx emissions on nearly half a million diesel cars in the U.S. over almost a decade, then conceded to cheating emissions with diesel cars in most other markets. The automaker has since been besieged by plummeting sales, criminal investigations, lawsuits and resignations and firings at the executive level.The cars affected include the diesel Volkswagen Golf, Jetta, Passat, Jetta Sportwagen, Beetle and Audi A3.

Volkswagen officials said the following in a statement: