Cars

What’s Volkswagen Doing with All Those Repurchased Diesels?

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Wondering where all the offending Volkswagen diesels will end up? Here’s a logistical breakdown of how VW plans to make nearly half a million cars magically disappear. (Note: This only applies to 2.0-liter vehicles.)

How many TDIs has VW bought back?

Through October 18, 340,000 owners and lessees have sent in registration forms indicating they want the company to buy back their cars under the government-negotiated compensation agreement. That’s nearly three-quarters of all 475,000 Volkswagen and Audi models with 2.0-liter diesel engines currently registered on U.S. roads. TDI owners and lessees still on the fence have another 22 months to decide.

Will VW crush every car?

Not at all. This isn’t the 2009 “Cash for Clunkers” program, in which the government paid $3 billion to have nearly 700,000 used cars destroyed, all in a desperate effort to drive up new-car sales. Volkswagen can’t resell the cars it buys; nor can it export them to other countries without modifying them to be EPA compliant. Since there is no EPA-approved modification—Volkswagen has multiple deadlines through October 2017 by which it must submit final modification proposals—the cars must be “rendered inoperable” by removing their main brain, the engine control unit (ECU). The rest of the cars can be scrapped for parts, and those parts can be resold here or abroad, including the engines. Only the ECU, the diesel oxidation catalyst, and the diesel particulate filter must be destroyed on each car.

Where will VW keep the vehicles?

Once VW dealers take the first cars, the factory will truck the TDIs to undisclosed storage facilities across the country. There is no telling whether Volkswagen will choose to stockpile hundreds of thousands of cars as it awaits EPA approval or begin stripping them immediately. Good news for VW owners of all stripes: The used-parts supply for late-model VWs could grow substantially, and prices potentially could fall as a result.

What about the emissions modification?

By the end of 2017, we should know whether VW can start fixing cars it has repurchased and offer this fix to current owners. That’s the best possible scenario. The limbo could easily spill over into 2018, and that’s only assuming the EPA and the California Air Resources Board (CARB) will okay the repairs. Emissions modifications, if approved, will be staggered in four stages. Last month, VW was scheduled to submit its final proposal for all 2015 TDI models of the Golf, Golf SportWagen, Jetta, Passat, Beetle, and Audi A3. This, however, is expected to be only an interim fix. By October 30, 2017, VW must submit a second proposal describing how it intends to complete the modifications on these same cars.

For older, 2009–2014 TDI versions of the Golf, Jetta, Jetta SportWagen, Beetle, and Audi A3 models, VW has until January 27, 2017. The 2012–2014 Passat TDI is due by March 3, 2017. The worst-case scenario for VW is if the remaining TDI owners keep their cars or otherwise ignore the buyback offer. If VW doesn’t repurchase 85 percent of the cars by June 2019, it faces additional penalties. Since there is no emissions-related recall, states have no way to force owners into modifying their cars or banning their registrations—unless, of course, CARB creates new regulations.

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