VW to Reimburse Customers over Fuel Economy Discrepancy


Volkswagen Group of America Inc. (VWGoA) has reached an agreement with private plaintiffs to resolve outstanding claims concerning the fuel economy ratings of certain Volkswagen Group model year 2013-2017 gasoline vehicles sold or leased in the U.S.

The U.S. Environmental Protection Agency (EPA) is revising estimates for a number of 2013-2017 Audi, Bentley, Porsche and Volkswagen vehicles in order to ensure consumers are given accurate fuel economy values, the federal agency says. The EPA is also requiring the Volkswagen Group to forfeit emissions credits under the greenhouse-gas (GHG) emissions standards for light-duty vehicles to account for under-reporting emissions.

In the course of the infamous investigation concerning defeat devices in Volkswagen’s diesel vehicles (i.e., Dieselgate), the EPA and the California Air Resources Board discovered that the company employed software to manage vehicle transmissions in gasoline vehicles. This software causes the transmission to shift gears during the EPA-prescribed emissions test in a manner that sometimes optimizes fuel economy and GHG emissions during the test, but not under normal driving conditions. The company employed this software in roughly 1 million gasoline, light-duty vehicles from model years 2013 through 2017 sold by Volkswagen in the U.S. under the brand names Volkswagen, Audi, Porsche and Bentley.

The EPA required Volkswagen to estimate the emissions and fuel economy impact of the software through extensive testing and other methods. Based on these investigations, Volkswagen found that deactivation of the software resulted in an impact to fuel economy on roughly 98,000 vehicles of approximately one mile per gallon.

Just as Volkswagen overstated the fuel economy of these vehicles, the company understated GHG emissions by approximately 220,000 metric tons. To account for these discrepancies, Volkswagen will forfeit approximately 220,000 GHG emission credits under EPA’s light-duty GHG emissions standard program. Volkswagen will also forfeit credits in the federal Corporate Average Fuel Economy program. The exact number of credits will be subject to approval by the EPA and the National Highway Traffic Safety Administration.

Under the proposed settlement with private plaintiffs, VWGoA has agreed, among other terms, to reimburse eligible customers for the fuel economy restatement. Eligible customers will receive payments ranging from $5.40 to $24.30 for each month the vehicle was owned or leased. The total value of the settlement, which is subject to court approval, is approximately $96.5 million.

VWGoA says it will also adjust its GHG credits to account for any excess credits associated with the fuel economy discrepancy. The adjustment is subject to final approval from the EPA.

“Volkswagen is committed to providing customers with transparent fuel economy data for our vehicles, in line with U.S. labeling requirements,” says Pietro Zollino, executive vice president of communications for VWGoA.

The settlement removes the uncertainty of protracted litigation and does not include any admission of liability or wrongdoing by Volkswagen, the automaker notes.

Potential claimants will have to submit a claim to receive compensation but do not need to take any action at this time. Individual class members will receive information about their rights and options (including the option to opt out of the settlement agreement) if the court grants preliminary approval of the proposed agreement.

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