Volkswagen Might Pay Every U.S. Diesel Owner $5,000 to Avoid a Trial

On the eve of a key U.S. deadline for a diesel emissions fix, Volkswagen has reportedly agreed to pay all American owners of afflicted TDI models $5,000 each.

The deal, reported by Germany’s Die Welt newspaper, would allow the automaker to avoid going to trial this summer, according to Automotive News.

Volkswagen was facing an April 21 deadline to outline a comprehensive fix for the 580,000 U.S. diesel models equipped with “ defeat devices” designed to sidestep emissions regulations. The deadline was set in March by a U.S. District Court judge.

Any fix would have to satisfy the Environmental Protection Agency and California Air Resources Board, either by fixing the vehicles, buying them back, offsetting their pollution, or a combination of tactics.

The EPA hasn’t commented on the supposed deal, which would cost $2.9 billion for the customer payouts alone. Last month, the automaker was said to be in talks to create two large environmental remediation funds designed to offset emissions from its diesel vehicles.

The news of a payout follows a Reuters report that Volkswagen is planning to increase the amount of cash set aside to deal with the financial fallout of the scandal. Already, the automaker has 6.7 billion euros ($7.6 billion) in its emergency fund, but the latest move would push the pile well into the double-digit billions.

Analysts have estimated that Volkswagen’s tally of costs could hit 30 billion euros ($33.9 billion), and predict that Volkswagen’s fourth-quarter earnings from 2015 (due to be released on April 28) could see a 70 percent drop.

The Reuters report also stated that Volkswagen was resisting efforts from U.S. consumers (serving as plaintiffs) to settle the matter in court, instead hoping to reach a deal with regulators.