Volkswagen AG (ETR:VOW) (OTCMKTS:VLKAY) is seeking to reach a comprehensive settlement agreement with regulators in the United States to resolve the emission-cheating scandal and many related issues, according to Reuters based on the statement of a senior manager at the German automaker.
The senior manager at Volkswagen said, “It must be our goal to negotiate a comprehensive solution, which could also include the lion’s share of expected penalties.” The executive requested Reuters not to reveal his identity because the discussions between the automaker and U.S. regulators were confidential.
Volkswagen violated the Clean Air Act (CAA)
In September, Volkswagen admitted cheating on the U.S. air pollution tests over the past six years, therefore violating the Clean Air Act (CAA). The automaker used software to circumvent the emission standards of the U.S. Environmental Protection Agency (EPA) for certain air pollutants.
The automaker’s violation of the CAA involves 600,000 vehicles including the four-cylinder engine Volkswagen and Audi diesel cars from model years 2009 to 2016. The automaker hasn’t reached an agreement with U.S. regulators on how to fix the affected cars.
The U.S. Department of Justice filed a lawsuit against Volkswagen for violating environmental laws and sent a civil subpoena to the automaker under a bank fraud law.
Volkswagen has until March 24, the deadline set by a federal judge, to submit a fix to the affected vehicles, which would be acceptable to regulators. The automaker’s senior manager commented that it would be unlikely to reach a compromise agreement by then.
According to the Volkswagen senior manager, the negotiations were focused on fixes for affected cars and compensation for excessive nitrogen oxide emissions. It was previously reported by Wirtschaftswoche, a German magazine, that the company could purchase emissions rights for nitrogen oxide.
Factory for electric cars in the U.S.
According to the executive, one of the ideas being discussed at the negotiation table is the possibility for Volkswagen to establish a factory for electric cars in the United States.
In January, Volkswagen CEO Matthia Mueller stated that they can fit a new catalytic converter system to most of the affected vehicles, which he believed would satisfy regulators.
“I think we can now offer a package that will come very close to what the EPA is expecting from us,” said Mueller at the time.
The automaker wants to fix as many of the affected vehicles if possible. If not, it would repurchase the cars from the owners.
