VW will fix, buy back more polluting U.S. diesel vehicles

By David Shepardson

WASHINGTON (Reuters) - Volkswagen AG has reached an agreement for a mix of buybacks and fixes for about 80,000 polluting 3.0-liter diesel VW, Porsche and Audi vehicles, a U.S. federal judge said on Tuesday, as the German automaker took another step to put a diesel emissions cheating scandal behind it.

During a hearing in San Francisco, U.S. District Judge Charles Breyer also said German engineering company Robert Bosch GmbH, which produced the software for the VW diesels, has agreed in principle to settle civil allegations made by U.S. diesel vehicle owners. Reuters reported on Monday that the settlement was expected to be worth more than $300 million.

VW admitted in September 2015 to installing secret software in 475,000 U.S. 2.0-liter diesel cars to cheat exhaust emissions tests and make them appear cleaner in testing than they really were. In reality, the vehicles emitted up to 40 times the legally allowable pollution levels.

The company in June agreed to a settlement worth about $15 billion to address those vehicles, including an offer to buy back all 475,000.

The 80,000 3.0-liter vehicles had an undeclared auxiliary emissions system that allowed the vehicles to emit up to nine times allowable limits.

The U.S. Justice Department said Volkswagen had agreed to contribute another $225 million to a fund to offset excess diesel emissions, while the state of California said in a separate court filing that Volkswagen had agreed to boost the number of electric vehicles it sells in the state.

The world's No. 2 automaker reached the new deal on vehicle fixes and buybacks with the Justice Department, U.S. Environmental Protection Agency and California state officials.

Volkswagen has agreed to add by 2020 at least three additional electric vehicles, including an SUV, in California and must sell an average of 5,000 electric vehicles annually. Volkswagen also agreed to pay California's state air board $25 million, the state said.

Breyer said owners of 3.0-liter vehicles would receive "substantial compensation" for getting their vehicles fixed or repaired but said there were some remaining issues to be resolved, and set a another hearing for Thursday for an update.

Volkswagen spokeswoman Jeannine Ginivan said the deal "is another important step forward in our efforts to make things right for our customers."