Report: $10 Billion VW Diesel Settlement in U.S. Due Next Week

Volkswagen AG has agreed to a $10 billion settlement to remedy diesel-powered vehicles it sold in the U.S. that had been rigged to cheat emission rules, sources tell Bloomberg News. The deal is expected to go before a federal court in San Francisco on June 28.

If approved, the plan will pay affected diesel owners between $1,000 and $7,000 in compensation.

The settlement also will fund an environmental remediation program administered by the U.S. Dept. of Justice, according to Bloomberg. It says the fund may pay for upgrades to many of the diesels under an initiative modeled after the existing Diesel Emission Reduction Act program funded by the Environmental Protection Agency.

VW also is expected to either buy back certain unrepairable vehicles or contribute more to the remediation fund to offset their continued high pollution levels, Bloomberg’s sources say.

The company admitted last September that it has sold 482,000 rigged diesels in the U.S. since 2009. The vehicles’ diesel are equipped with software to detect and meet nitrogen oxide emission tests, but then allow the engine to release as much as 40 times the allowable limit for NOx.