Volkswagen AG agreed to pay $1.2 billion to resolve U.S. consumer claims over tainted large diesel engines, adding to the carmaker’s financial burden as it works through a pile of legal challenges resulting from its emissions cheating.

The proposed settlement, with the Federal Trade Commission and drivers of about 78,000 diesel models with 3.0-liter engines, is Volkswagen’s latest step in overcoming the biggest scandal in its history and brings the total cost of penalties, buybacks and fixes in North America so far to more than $23 billion. The deal covers VW Touaregs, several Audi models and Porsche Cayennes, according to filings in San Francisco federal court.

“We will continue to work to earn back the trust of all our stakeholders,” Hinrich Woebcken, Volkswagen Group of America’s chief executive officer, said in a statement. The agreement means that all customers with affected vehicles in the U.S. now have “a resolution available to them.”

Volkswagen, the world’s biggest carmaker, admitted in 2015 that about 11 million of its diesel cars were outfitted with software used to deceive emissions testers, sparking probes, lawsuits and recalls around the world. Costs resulting from the scandal so far have blown past the 18.2 billion euros ($19.6 billion) that the company has set aside to deal with the issue.

The total tally includes a $14.7 billion agreement reached last year to buy back cars with 2.0-liter diesel engines that carry the so-called defeat devices, and a $4.3 billion settlement of criminal and civil penalties in the U.S. agreed in January that requires the company to plead guilty to three felony counts. Volkswagen is also involved in investor lawsuits in the U.S. and in Germany related to how the emissions-test rigging affected the stock price, as well as consumer lawsuits and a criminal probe in Germany.

The latest settlement, filed just before midnight Tuesday in San Francisco, requires Volkswagen to repair or buy back vehicles, in addition to offering cash compensations. It includes the buyback of as many 20,000 cars with 3-liter engines, which comes on top of more than 500,000 diesel vehicles the company had previously agreed to repurchase or fix.

The deal finalizes terms that had already been agreed on in December, when the cost was estimated at about $1 billion. VW’s burden will increase to as much as $4.04 billion if the repairs don’t take place on time, according to the filing.

In a separate settlement, technology provider Robert Bosch GmbH agreed to pay $327.5 million over allegations that it played a role in developing VW’s diesel cheating technology as early as the late 1990s.

U.S. District Judge Charles Breyer is scheduled to consider the proposed 3-liter settlement on Feb. 14. If he grants preliminary approval, car owners and others would be given a chance to comment on the agreement before it becomes final.

The case is In Re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, 15-02672, U.S. District Court, Northern District of California (San Francisco).

Topics USA Claims