Volkswagen AG has agreed to set aside at least $10 billion to resolve civil claims by the U.S. government and lawsuits by American car owners over diesel vehicles rigged to cheat pollution controls, a person with direct knowledge of the matter said.
The parties reached the accord ahead of a Thursday deadline set by a federal judge for the carmaker to say how it would fix the vehicles. Volkswagen has been negotiating with U.S. environmental regulators on an acceptable solution. Judge Charles Breyer said that fixing the almost 600,000 vehicles or getting them off the road would be the first step to any settlement. The stock rose as much as 7.5 percent in Frankfurt.
An agreement with U.S. authorities would be a milestone for Volkswagen as it seeks to emerge from the seven-month-old scandal. The German carmaker has been battling to appease regulators and regain customers’ trust after admitting in September that it rigged the exhaust systems of 11 million diesel-powered cars worldwide to pass official emissions tests. The crisis led to the departure of Chief Executive Officer Martin Winterkorn and caused Volkswagen to delay releasing its 2015 earnings due to uncertainty over the costs of the scandal.