Volkswagen Isn’t Sure What to Do With the Diesel Cars It Bought Back

Volkswagen said it would buy back around 500,000 diesel-powered vehicles with emissions cheating software if it couldn’t find a fix for them. This was part of an agreement made last year between the U.S. and Volkswagen Group for the automaker’s diesel emissions cheating scandal, which also led to the indictment of six company executives. However, according to a new report from Bloomberg, Volkswagen is still figuring out what to do with the vehicles it bought back, and they are now stockpiling in storage lots.

According to the report, around 15,000 owners are going to Volkswagen and Audi dealerships so that their vehicles can be bought back by the automakers in exchange for payments as high as $40,000 depending on the car. Furthermore, under the terms of the settlement, cars that are bought back can’t be resold unless they comply with emissions regulations, and VW can’t export them to countries with more lenient emissions requirements.

Over 288,000 owners opted for the buyback option as of February 18 this year with 138,000 already refunded. There are 52,000 owners, however, that are waiting for a fix instead and didn’t consider the buyback program. Repair proposals are still undergoing review by U.S. regulators, and only 67,000 cars from the 2015 model year have gotten the go-ahead since they are part of the latest generation and are the easiest to fix.

John German, a senior fellow at the International Council on Clean Transportation, told Bloomberg that even the newer cars need to get their entire after-treatment system and particulate filter replaced. He also pointed out that Volkswagen could also install a system that sprays a urea-based solution to clean the pollutants in the exhaust in older vehicles produced from 2009 to 2014. However, it would be an expensive retrofit since it would require putting a urea tank in cars that weren’t designed to have one. This means that the older diesel-powered vehicles may end up getting scrapped instead if costs for the fix are too high.

A Volkswagen spokeswoman stated to Bloomberg that it’s important for the automaker to make things right for its customers and to rebuild consumer trust in the brand in the U.S. Fred Emich, general manager of Emich Volkswagen in Denver, also told the publication that the automaker has set up a threshold to determine if it’s more cost effective to scrap a car instead of fixing it. Emich added that the service department of his dealership has taken a hit because of the emissions cheating scandal which has removed around 200,000 diesel-powered cars from the road.

Volkswagen has until June 20, 2019 to finish buying back or repairing at least 85 percent of its rigged 2.0-liter diesel vehicles. In the event that the automaker falls short, it would need to pay $85 million to the EPA and $13.5 million to CARB for each percentage point below the agreed threshold. Volkswagen has since hired 1,300 contractors for its buyback program, including so-called “settlement specialists” at Volkswagen and Audi dealerships who cut checks for owners opting for the buyback.

Source: Bloomberg

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