VW faces deadline in possible emissions scandal deal

San Francisco - Volkswagen faced a Monday deadline (Dec. 19) to tell a federal judge whether it had reached a deal with US regulators and attorneys for car owners on the remaining 80 000 diesel vehicles that cheated on emissions tests.

US District Judge Charles Breyer gave the sides more time to negotiate by twice postponing a Friday (December 16) hearing to update him on a potential settlement. Breyer said the parties had made substantial progress and he was optimistic they would arrive at a resolution.

Recall 80 000 cars

The talks aim to hammer out what to do about 80 000 three-litre diesel cars that were programmed to skirt emissions tests. Volkswagen attorney Robert Giuffra has said the company believes it can recall and fix the three-litre vehicles without affecting their performance.

The German automaker previously reached a deal for the other 475 000 polluting vehicles in the scandal. That settlement gives owners of those two-litre diesel cars the option to have Volkswagen buy back their vehicles regardless of condition for the full trade-in price on September 18 2015, when the scandal broke, or pay for repairs.

Volkswagen also will pay owners $5100 to $10 000 each, depending on the age of the car and whether the owner had it prior to September 18.

The company has agreed to spend up to $10-billion compensating consumers.

The global scandal erupted last year when the US Environmental Protection Agency (EPA) said Volkswagen had fitted many of its cars with software to fool emissions tests. Car owners and the US Department of Justice sued.

More on the VW emissions scandal 

The software recognised when the cars were being tested on a treadmill and turned on pollution controls. The controls were turned off when the cars returned to the road. The EPA alleged the scheme let the cars spew up to 40 times the allowable limit of nitrogen oxide, which can cause respiratory problems in humans.

The scandal has damaged Volkswagen's reputation and hurt its sales. The company has reached a separate $1.2-billion deal with its US car dealers and is still facing potentially billions more in fines and penalties and possible criminal charges.