Volkswagen Lawsuit: Settlements, Penalties, and Class Actions

The Volkswagen lawsuit story is really several stories stacked on top of each other. It starts with “Dieselgate,” the 2015 revelation that VW rigged roughly 590,000 diesel cars in the United States to cheat emissions tests, and it has since cost the company more than $33 billion worldwide in penalties, buybacks, and settlements. It also produced federal criminal convictions, an ongoing fraud trial in Germany against the former CEO, and a growing docket of unrelated product-defect class actions covering turbochargers, seat latches, transmissions, oil consumption, and electric-vehicle batteries.

What Volkswagen Did

VW installed software known as a “defeat device” in its diesel engines. The code detected when a car was on an emissions dynamometer and turned pollution controls on for the test. On the road, the controls were effectively off. The 2.0-liter engines emitted nitrogen oxides at up to 40 times the federal limit, and the 3.0-liter engines at up to nine times.¹ Federal prosecutors later described a years-long conspiracy running from engine developers up through senior management, while VW marketed the same cars under a “clean diesel” banner as environmentally friendly and 50-state compliant.²

About 500,000 of the U.S. cars were 2.0-liter diesels — Jetta, Jetta Sportwagen, Passat, Golf, Golf Sportwagen, Beetle, Beetle Convertible from model years 2009–2015, and the 2010–2015 Audi A3. Roughly 90,000 more were 3.0-liter diesels across VW Touareg, several Audi models (Q7, A6 Quattro, A7 Quattro, A8, A8L, Q5), and the Porsche Cayenne, spanning 2009–2016 depending on model.¹ Globally, VW admitted around 11 million vehicles carried the software.³

What U.S. Owners Got

Owners and lessees of 2.0-liter cars were covered by a settlement of up to $10.033 billion, given final approval on October 25, 2016 by Judge Charles Breyer.⁴ The core choice was a buyback at pre-scandal (September 2015) retail value or, if regulators approved a fix, a modification plus a cash payment for the deceptive advertising. Buyback amounts ran roughly $12,500 to $44,000 depending on model, year, mileage, and trim. Owners underwater on their loans got payoff coverage up to 130 percent of the buyback figure, and lessees could walk away at no cost.⁵

Almost everyone chose to hand the car back. According to the FTC, 86 percent of eligible U.S. claimants took the buyback or ended their lease, and defendants ultimately paid consumers more than $9.5 billion.⁶

A separate 3.0-liter settlement of about $1.2 billion followed on May 17, 2017. Older “Generation 1” Touareg and Audi Q7 owners (2009–2012) were eligible for buybacks or lease terminations. Newer “Generation 2” vehicles (2013–2016 across VW, Audi, and Porsche) were slated for an emissions-compliant repair if VW could get one approved by the EPA and CARB; if not, those owners could also demand a buyback.⁷

Environmental and EV Charging Payments

Two other big pots came out of the diesel settlements. A $2.925 billion environmental mitigation trust ($2.7 billion from the 2.0-liter deal, $225 million from the 3.0-liter deal) went to all 50 states, D.C., Puerto Rico, and federally recognized tribes in rough proportion to the number of cheating diesels registered in each place. The money has largely gone to replacing older diesel buses, trucks, and heavy equipment.⁴

VW also committed $2 billion over ten years to zero-emission vehicle infrastructure, split $1.2 billion nationally and $800 million in California, carried out through a subsidiary called Electrify America. As of 2025, Electrify America reported 617 commissioned charging stations outside California and was operating under a fourth investment cycle of $300 million running through the end of 2026.⁸

Federal Civil Penalties and the State AG Deal

A third federal consent decree, approved in April 2017, required VW to pay a $1.45 billion civil penalty covering EPA fines, customs fraud claims, and related financial violations.⁴

A coalition of 43 states plus D.C. and Puerto Rico, led by Connecticut, Massachusetts, New York, Oregon, Tennessee, and Washington, reached its own $570 million settlement with Volkswagen, Audi, and Porsche over state consumer protection violations.⁹ VW paid another $20 million to reimburse investigation costs.¹⁰

Criminal Charges and Convictions

On January 11, 2017, Volkswagen AG agreed to plead guilty to three federal felonies: conspiracy to defraud the United States, wire fraud, and Clean Air Act violations; obstruction of justice for destroying documents; and importing merchandise by false statements. The formal guilty plea followed on March 10, 2017 before Judge Sean F. Cox in the Eastern District of Michigan, and on April 21, 2017 the company was sentenced to a $2.8 billion criminal penalty. Combined with the same-day $1.5 billion civil resolution, the criminal and civil package totaled $4.3 billion.¹¹¹²

Prosecutors also went after individuals. VW engineer James Liang pleaded guilty in September 2016 and was sentenced to 40 months in prison and a $200,000 fine. Former compliance manager Oliver Schmidt was arrested in Florida, pleaded guilty in August 2017, and received 84 months and a $400,000 fine. Five other indicted executives — Richard Dorenkamp, Heinz-Jakob Neusser, Jens Hadler, Bernd Gottweis, and Jürgen Peter — live in Germany and have not been extradited. Giovanni Pamio was charged separately by complaint in July 2017.¹³

Former CEO Martin Winterkorn, who resigned days after the scandal broke in September 2015, faces fraud and market manipulation charges in Germany carrying up to 10 years. His trial in Braunschweig opened in early September 2024 but was suspended almost immediately after he broke a leg at home. As of May 2025 the case was still suspended for health reasons, with no set restart date. Winterkorn denies wrongdoing.¹⁴¹⁵

In a related German case, the Munich regional court convicted former Audi CEO Rupert Stadler of fraud on June 27, 2023. He admitted, under a plea deal, letting cars with the illegal software stay on sale after the scandal broke, and received a 21-month suspended sentence and a €1.1 million fine. Former Audi engine chief Wolfgang Hatz and an engineer also received suspended sentences. Appeals are pending.¹⁶¹⁷

SEC Investor Case

The SEC sued in March 2019, alleging VW defrauded U.S. investors by raising billions in bond offerings while hiding the emissions cheating from underwriters, letting the company borrow at more favorable rates. The case was fully resolved in April 2024 when the U.S. District Court for the Northern District of California entered final judgment against VW’s U.S. finance subsidiary. The company paid $48.75 million — $34.35 million in disgorgement and $14.4 million in prejudgment interest — without admitting or denying the allegations, and the court dismissed remaining claims against Volkswagen AG and Winterkorn with prejudice.¹⁸

Diesel Cases Still Active Abroad

Shareholder claims outside the U.S. and Canada total roughly €8.6 billion. The largest cluster is a model-case proceeding before the Braunschweig Higher Regional Court led by Deka Investment GmbH, where witness testimony that began in September 2023 continued through 2025, centered on when VW board members knew about the software. VW has recognized about €0.4 billion in provisions for known diesel-related legal risks and disclosed roughly €4.0 billion in contingent liabilities, €3.8 billion of it tied to the German investor lawsuits, while maintaining that it met its disclosure obligations.¹⁹¹⁷

Consumer-side diesel litigation is also still moving in several countries:

France: A CLCV consumer class action for up to one million vehicle owners was ruled admissible in March 2025 and is expected to be heard in 2027. In February 2026, VW was indicted in Paris on charges of serious deception of customers and environmental offenses; the company is contesting on double-jeopardy grounds tied to a 2018 German fine. In May 2026, a French court found VW “failed in its obligation of conformity” for affected vehicles.²⁰
Brazil: Two class actions on Amarok vehicles, one covering roughly 17,000 and another roughly 67,000.
United Kingdom: Claims served in England, Wales, and Scotland in late 2024.
South Africa: An opt-out class action for approximately 80,000 vehicles.
Netherlands: A July 2025 settlement resolved EA 189 vehicle claims, but an opt-out class action for other Euro 6 diesel engines is still pending.¹⁹

Non-Diesel Class Actions Against VW and Audi

Owners of newer VW, Audi, and Porsche vehicles have brought a separate wave of product-defect class actions in the U.S. that have nothing to do with emissions.

EA888 Turbocharger Wastegate

In Kimball v. Volkswagen Group of America, Inc., owners of VW and Audi vehicles with the EA888 2.0-liter turbocharged engine alleged that the turbocharger’s wastegate components failed prematurely. The settlement received final approval on December 4, 2025 and covers 2008–2024 model-year vehicles across three engine generations. Owners who paid for turbocharger repairs can be reimbursed 50 percent of repair costs, or 40 percent if the paperwork doesn’t identify a covered failure cause. Repairs at non-authorized shops are capped at a maximum eligible invoice of $3,850. Generation 3 vehicles also received a warranty extension to 8.5 years or 85,000 miles that covers half the cost of future wastegate-related repairs.²¹

Atlas Second-Row Seat Latch

In Tijerina v. Volkswagen Group of America, Inc., owners of 2018–2024 VW Atlas vehicles alleged defective second-row seat latching mechanisms. The settlement, with a final fairness hearing scheduled for August 2025, extends the latch warranty to 10 years or 100,000 miles and offers 100 percent reimbursement for owners who already paid for qualifying repairs.²²

Jetta and Tiguan Transmission

In Parrish v. Volkswagen Group of America, Inc., owners of 2019 Jetta and 2018–2020 Tiguan vehicles alleged defective eight-speed transmissions causing grinding, hard shifts, and oil leaks. The settled deal gives Jetta owners a free software update and driveshaft damper installation, plus up to 100 percent reimbursement for related out-of-pocket repairs.²³

Tiguan Oil Consumption

Suits filed in 2024 and 2025 allege that 2022–2023 Tiguans burn excessive oil because of faulty piston rings in the EA888 engine. In Zeiders v. Volkswagen Group of America, a New Jersey federal judge largely denied VW’s motion to dismiss in January 2026, letting claims for breach of warranty, fraudulent concealment, and consumer fraud go forward.²⁴

ID.4 Battery Fire Risk

A proposed class action filed in June 2026 in New Jersey federal court alleges that 2023–2025 VW ID.4 electric crossovers have high-voltage batteries with misaligned electrodes creating a spontaneous fire risk. Plaintiffs allege that VW’s interim safety guidance — including not charging overnight and avoiding DC fast charging — makes the cars essentially unusable as advertised. The vehicles had already been subject to multiple NHTSA recalls.²⁵

Audi Q5 Subframe Corrosion

Also in June 2026, a class action was filed alleging that 2009–2017 Audi Q5 and SQ5 models use plastic protective covers on the rear subframe that trap moisture and road salt, causing hidden corrosion that can weaken the structure. Reported repair costs run from several thousand dollars to $10,000, and Audi has declined warranty coverage.²⁶

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Fortune. Volkswagen Ex-Boss Martin Winterkorn Dieselgate Trial Suspended
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Turbo Class Settlement. FAQ
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Atlas Seat Latch Settlement. FAQ
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Berger Montague. Volkswagen
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Shub & Johns. Court Largely Denies Motion to Dismiss in VW Tiguan Oil Consumption Class Action
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Autoblog. Volkswagen ID.4 Battery Lawsuit
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Yahoo Autos. Audi Q5 Owners Sue Over Subframe Defect