Volkswagen said talks to settle a huge collective lawsuit in Germany over the manufacturer’s dieselgate scandal collapsed today.
VW had offered a settlement of €830m (£694.7m) with German drivers who purchased their emissions test-cheating diesel cars.
But talks with the German consumer association VZBV to provide compensation broke down, with each party blaming the other.
The car manufacturer said it could not accept a further €50m in fees demanded by lawyers representing the consumer group. Meanwhile, VZBV said the system of redress was inadequate.
“The failure of settlement talks with […] VZBV should not come at the expense of customers,” VW said in a statement.
It added that drivers with the VZBV would still be entitled to compensation.
Volkswagen was rocked by the dieselgate scandal in 2015, when it was found to have deliberately understated emissions from some of its diesel models.
The scandal led to a large number of prosecutions and lawsuits against the company.
Since 2015, VW has fallen behind its international competitors in efforts to produce hybrid and electric cars as the emphasis shifts to cleaner vehicles.
This is part of wider international attempts to address climate change.
Seperately, VW announced today that it would close the two coal-fired power stations that it uses to power its main plant in Wolfsburg.
The company’s chief executive, Herbert Diess, said he has refused offers to buy the plants as VW fights to cut the factory’s C02 emissions by 60 per cent.
They will be replaced by cleaner and more efficient gas turbine plants.