VW to offer incentives for diesel owners to adopt cleaner models

Move comes as VW executive pleads guilty in US court

Volkswagen Group will offer incentives to drivers of older diesel models of its five main passenger-car brands to switch to cleaner vehicles in a bid to help cut pollution, it said.

The move will be rolled out across the European Union and will cover all VW brands, including Volkswagen, Audi, Seat, Skoda, Porsche and VW Commercial vehicles.

The firm said incentives are currently being prepared for owners of diesel models designed to meet the older Euro-1, Euro-2, Euro-3 and Euro-4 emissions standards and will be on offer soon, but it did not disclose any financial details or what the offer might entail for Irish motorists. It’s likely, however, to take a similar form to scrappage offers previously rolled out by car firms here.

The carmaker reiterated it will install a software upgrade on about four million Euro-5 and Euro-6 models in Germany as part of a deal agreed with German top-level politicians on Wednesday to help prevent diesel cars being banned from driving into city centres. The upgrades will not be necessary on the cars already recalled for the fix related to the fitting of so-called defeat devices designed to cheat US emissions tests. An estimated 110,000 Irish cars are involved in this recall and it is believed that work has been carried out on close to 65,000 of these already.


Guilty plea

The news comes on the day a Volkswagen AG executive charged in relations to the diesel emissions scandal pleaded guilty in a US district court in Detroit.

Oliver Schmidt, former head of US environmental compliance at Volkswagen, pleaded guilty to criminal charges in federal court in Detroit for his role in the automaker's decade long conspiracy to cheat on emissions tests.

Mr Schmidt, a German national who appeared in US district court in Detroit on Friday, was arrested in January while holidaying in Miami.

"He pleaded guilty to conspiring to defraud the United States, to commit wire fraud, and to violate the Clean Air Act", according to a court statement. The first charge carries a maximum penalty of 5 years in prison and/or a $250,000 fine or twice the gross gain or loss resulting from the violation, the court said. The second charge carries a maximum penalty of 2 years in prison and a $250,000 or twice the gross gain or loss resulting from the violation.

“In exchange for Schmidt’s guilty plea, federal prosecutors dropped a third charge, wire fraud, which carries a maximum penalty of 20 years in prison and/or a $250,000 fine”, the court said in a statement.

Under the terms of a plea agreement with federal prosecutors, Schmidt could face up to 84 months in prison and a fine ranging from $40,000 to $400,000. Although the agreement does not call for him to pay any restitution, it would require that he be deported after completing the sentence, the court said. Mr Schmidt, who has been in custody since his arrest in January, will remain confined pending sentencing on December 6th.

US prosecutors have amassed more than 4.3 million documents covering more than 40 million pages in the ongoing investigation.

In March, Volkswagen pleaded guilty to three felony counts under a plea agreement to resolve US charges it installed software in vehicles to evade emissions tests.

Volkswagen spokeswoman Jeannine Ginivan declined to discuss Schmidt's case and said the auto giant "continues to co-operate with investigations by the department of justice into the conduct of individuals".

Other arrests

Earlier in July, the justice department charged former Audi manager Giovanni Pamio with directing employees to design software enabling thousands of Audi diesel cars to beat US emissions tests. He was arrested in Germany.

James Liang, a VW employee who pleaded guilty to misleading regulators, is co-operating with prosecutors and will be sentenced on August 25th.

Among those indicted earlier were Heinz-Jakob Neusser, former head of development for VW Brand and two former heads of engine development, Jens Hadler and Richard Dorenkamp.

Most of the Volkswagen executives charged are in Germany and may not travel to the US since Germany typically does not extradite its citizens.

“It is now clear that Volkswagen’s top executives knew about this illegal activity and deliberately kept regulators, shareholders and consumers in the dark – and they did this for years,” said FBI deputy director Andrew McCabe in January. “We can’t put companies in jail but we can hold their employees personally accountable.”

Volkswagen has agreed to spend as much as $25 billion in the US to resolve claims from owners and regulators over polluting diesel vehicles and offered to buy back about 500,000 vehicles. It has rolled out a compensation scheme for affected motorists there, with payouts averaging $10,000. It has, however, declined to compensate European motorists, leading to thousands of legal actions, including several hundred in Ireland.

Michael McAleer

Michael McAleer

Michael McAleer is Motoring Editor, Innovation Editor and an Assistant Business Editor at The Irish Times