Volkswagen and Audi Agree to $85 Million Settlement with Texas over Environmental Violations

The Volkswagen Group, and its subsidiary Audi, have reached an $85 million settlement in principle with Texas over violations of the state’s environmental laws relating to the diesel cheating scandal. The Texas Attorney General, Ken Paxton, announced the settlement on Thursday, which includes a civil penalty for the companies’ unlawful actions.

Texas Supreme Court Ruling Paves Way for Environmental Lawsuit

The settlement comes after a Texas Supreme Court ruling earlier this month allowed the state’s environmental lawsuit against Volkswagen and Audi to proceed. While Volkswagen previously settled U.S. actions related to the emissions scandal for over $20 billion, this did not exempt the company from liability under state and local government laws.

“They’re Dead Wrong,” Says Texas Attorney General

The Texas Attorney General’s office did not provide any further details of the settlement, but Paxton issued a statement congratulating the decision. “If a company thinks they will avoid accountability when they violate Texas laws, endanger Texans, and pollute our environment, they’re dead wrong. Volkswagen and Audi are finding that out the hard way, and now they are paying the price,” Paxton said.

The Volkswagen Emissions Scandal

In 2015, Volkswagen admitted to using advanced software to bypass emissions requirements in approximately 11 million of its vehicles worldwide. The company also misled the U.S. Environmental Protection Agency (EPA), which started to investigate the situation in 2014.

Ohio’s Settlement with Volkswagen

Volkswagen’s U.S. subsidiary tried unsuccessfully to argue in 2021 that only the federal government could pursue emissions claims under the Clean Air Act, the landmark U.S. environmental law. In 2022, Ohio settled with Volkswagen for $3.5 million, a small fraction of the initial amount demanded. Volkswagen had argued that Ohio’s claims could have exceeded “$127 billion per year” for a multi-year period.