A federal judge on Tuesday granted preliminary approval for a $10 billion settlement in which Volkswagen AG will offer to buy back up to 475,000 polluting 2.0 liter diesel-powered vehicles.
U.S. District Judge Charles Breyer in San Francisco set an October 18 hearing for final approval.
The preliminary approval means Volkswagen (VLKAY) will soon enable owners of the vehicles to access a website to learn how much they are eligible to receive.
Owners will be paid at least $5,100 in compensation—in addition to the value of the vehicle. The value of the car may decline based on the number of miles driven, but will not be lower if it has dents or scratches.
The settlement, announced in June, is worth $14.7 billion in total. It includes the largest-ever automotive buy-back offer in the United States, repairs—if regulators approve—and payments to governmental agencies.
Volkswagen also plans to offer a new proposal to fix 85,000 polluting 3.0 liter vehicles after regulators rejected an earlier plan, a Justice Department lawyer said on Tuesday. Earlier this month, the California Air Resources Board rejected as insufficient a plan to fix the vehicles, which include VW and Audi luxury cars from model years 2009-2016.
At the hearing, Justice Department lawyer Joshua Van Eaton said the German automaker had been meeting with regulators in recent weeks and planned to offer a new fix proposal in August.
Breyer said he wants another update on the 3.0 liter vehicle talks at an Aug. 25 hearing.
VW admitted in September that it installed secret software that allowed U.S. vehicles to emit up to 40 times legally allowable pollution.
Under the Justice Department deal, VW will provide $2 billion over 10 years to fund programs directed by California and the Environmental Protect Agency to promote construction of electric vehicle charging infrastructure, development of zero-emission ride-sharing fleets and other efforts to boost sales of cars that do not burn petroleum.
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VW also agreed to put up $2.7 billion over three years to enable government and tribal agencies to replace old buses or to fund infrastructure to reduce diesel emissions.
Separately, VW announced a settlement with 44 U.S. states, the District of Columbia and Puerto Rico that will cost at least $600 million, bringing the total to as much as $15.3 billion.
Last week, three states filed new lawsuits, saying that VW violated state environmental laws and seeking hundreds of millions in additional penalties.
