The damage Dieselgate did to Volkswagen of North America — and to the bottom line of the parent company — is immense. Buyback liabilities ($10.5 billion), payments to the benefit of Electrify America foundation ($2.0 billion over 10 years), environment protection fees ($2.7 billion), dealer compensation ($1.2 billion), and legal expenditures ($4.3 billion) add up to a whopping $20.7 billion in red ink. Affected are up to 475,000 diesel-powered Volkswagen and Audis, among them 12,000 unregistered 2014-’15 model year units.
Compiled in compounds all over the country, a large portion of this monumental metal mountain can be fixed. Most vehicles are to be resold after receiving approved software and hardware updates. About half of the diesels have been recalled by now and VW expects an eventual participation rate of 85 percent and a buyer loyalty rate of 40 percent.
To boost the tarnished brand image, the Atlas and Tiguan Allspace crossovers went on sale with a six-year, 72,000-mile warranty. With diesel dead in the water, VW’s marketing team will be hard-pressed to make an efficiency argument until the first bespoke EVs arrive in three years, starting with the I.D.
Between then and now, water will be carried by the aforementioned crossovers as well as new U.S.-only models, including the Jetta replacement (Detroit 2018), a five-seat Atlas (late 2018), and the next Passat (2019), which is again based on the ancient PQ platform.