Volkswagen AG yesterday agreed to a $1 billion settlement to fix or buy back 80,000 polluting 3.0-liter V-6 diesel vehicles in another, but not the last, step to put its diesel emissions scandal behind it.

The affected vehicles include models from Audi, Porsche and Volkswagen that were equipped with software to cheat U.S. emission standards.

The deal is in addition to the $15 billion settlement in June that covered 475,000 VW’s with a smaller 2.0-liter four-cylinder diesel engine that had a secret “defeat device” software to cheat exhaust emissions tests and make them appear cleaner in testing than they actually were.

SEE ALSO: Volkswagen Diesel Scandal Affecting Public Perceptions, Whole Automotive Industry

Automotive News reported that under the new agreement VW will buy back or fix 20,000 of the affected vehicles and fix another 60,000.

If the German automaker can’t come up with an EPA-authorized repair for the second group, it will be required to offer a buyback to those customers, as well.

In announcing the agreement, U.S. District Judge Charles Breyer said owners would get “substantial compensation” once their cars were purchased back or fixed, but went on to say there’s still a lot yet to be finalized.

Breyer yesterday also said German engineering company Robert Bosch, the German engineering firm that made the software for the VW diesels, has also agreed in principle to settle civil allegations at a cost of about $300 million.

SEE ALSO: Bosch Being Investigated for its Role in VW Diesel Scandal

In addition to the buyback and fix, a new agreement between the U.S. Justice Department and VW requires the company to spend $225 million mitigating excess NOx emissions caused by these polluting vehicles.

Also, in a separate California court filing Volkswagen agreed to produce three additional electric vehicles for sale by 2020 and must sell an average of 5,000 EVs annually.

VW also agreed to pay the California Air Resources Board $25 million.

Meanwhile, the VW Group reached a $1.5 billion settlement with Canadian antitrust authorities for the 105,000 affected diesel vehicles sold in Canada.

Next up, VW continues to face a criminal investigation by the Justice Department and potential charges in Germany over the emissions scandal — both are very big steps.

Automotive News