Volkswagen may buy back thousands of US diesel-engined cars

Volkswagen may buy back tens of thousands of cars with diesel engines that can’t be easily fixed to comply with US emissions standards as part of its efforts to satisfy the demands of regulators.

Negotiations between the German car maker and the US Environmental Protection Agency are continuing and no decisions have been reached. Still, a buyback would be an extraordinary step that demonstrates the challenge of modifying vehicles that were rigged to pass emission tests.

VW has concluded it would be faster to repurchase some of the more than 500,000 vehicles than fix them, said the sources.

One source said the number of cars that might be bought back from their owners totals about 50,000, a figure that could change as talks continue.

“We’ve been having a large amount of technical discussion back and forth with Volkswagen,” EPA administrator Gina McCarthy said on Thursday, when asked about the possibility of VW having to buy back some vehicles. “We haven’t made any decisions on that,” she said.

McCarthy told reporters after an event in Washington that VW’s proposals to bring its cars into compliance with emissions standards have so far been inadequate.

“We haven’t identified a satisfactory way forward,” Ms McCarthy said. The EPA is “anxious to find a way forward so that the company can get into compliance,” she said.

VW is continuing talks with the US authorities and working toward a solution, said Eric Felber, a company spokesman. He declined to comment on details of the discussions.

The models in question are not the oldest ones, the so-called Generation 1 cars, the sources said. VW’s US chief, Michael Horn, said in October that those models would be the most complicated to bring into compliance.

VW engineers have been working on adding an SCR catalytic converter to those cars, the people familiar with the process said.

This would mean installing a tank of urea-based solution that, when mixed with exhaust, binds with the smog-causing nitrogen oxides to reduce emissions.

McCarthy is scheduled to meet with Volkswagen chief executive Matthias Mueller at his request next Wednesday in Washington — the day before the California Air Resources Board is scheduled to publicly respond to VW’s proposed repairs.

Mueller will be making his first visit to the US as VW’s chief executive next week.

Two Democratic US senators urged Volkswagen to offer US consumers multiple options to compensate for damages and inconvenience of owning the diesel cars, including a speedy repair and money for lost resale value and any decrease in fuel economy.

Bloomberg