Wed | Aug 16, 2017

VW may compensate owners of diesel cars for loss of value

Published:Friday | October 9, 2015 | 10:00 AM

Volkswagen could compensate owners of diesel-powered cars that emit high levels of pollutants, possibly by paying them for the lost value of their vehicles, the company's top US executive said Thursday.

Speaking to lawmakers investigating the emissions cheating, US CEO Michael Horn also said fixing most of the 500,000 affected cars in the US could take one to two years, possibly more. The fix, he said, would not hurt fuel mileage, but it could hinder the cars' performance, knocking one or two miles-per-hour off the top speed.

"There might be a slight impact on performance," Horn said to a subcommittee of the House Energy and Commerce Committee.

Under questioning from Representative Jan Schakowsky, Horn said VW isn't considering offering owners loaner cars because the US government says the diesels equipped with a so-called defeat device are safe to drive. The cars, though, emit 10 to 40 times the nitrogen oxide pollution that's allowed under federal law.

VW has admitted to installing the defeat devices on Volkswagen and Audi cars with four-cylinder diesel engines dating to the 2009 model year. The devices switch on pollution controls when the cars are being tested, but turn off the controls when the software determines that the cars are back on real roads. Affected models include the Jetta, Golf, Beetle, Passat and Audi A3. VW has said a total of 11 million cars worldwide have the software.

Horn said software changes alone will work to fix newer models, but 430,000 cars dating to 2009 will need mechanical repairs that are still being developed. Horn said engineers are working on either a larger catalytic converter that would treat nitrogen oxide, or a system that injects a chemical called urea into the exhaust.

Software alone will repair some newer Passat models, but they may need an additional sensor, Horn said. He didn't have an exact timeline on when the repairs might take place, but said it could take multiple years to develop the fix, get government approval and distribute parts to the company's US dealers. The fixes may take five to 10 hours per car for dealership mechanics to complete, he said.

VW has set aside US$7.3 billion to pay for the scandal, but Horn said he is unsure if that will be enough. Ultimately, the total cost will depend on fines from government agencies, how much it costs to fix the cars and the price tag for any compensation to customers.