Volkswagen says it might not resume U.S. sales of diesel vehicles

By David Shepardson

WASHINGTON (Reuters) - Volkswagen AG said on Wednesday it has not decided if it will resume selling diesel vehicles in the United States, even if it were allowed to, in the wake of the automaker's emissions cheating scandal.

The German automaker has been barred from selling diesel vehicles in the United States since late 2015 after it acknowledged using "defeat devices" to evade U.S. diesel emissions standards.

The company is in talks with U.S. regulators but approval to resume sales of diesel vehicles is not expected before next year at the earliest.

Volkswagen spokeswoman Jeannine Ginivan said in a statement the automaker will continue to evaluate diesel engines for the U.S. market, but the company has not disclosed future product decisions.

Ginivan said diesel "will be pursued where it makes sense for the market but new powertrain concepts like pure (electric vehicles) and a variety of hybrid models are moving towards the forefront especially as stricter regulations come into play."

She added the company does "not expect diesel to return to the U.S. with the same significance."

The automaker withdrew its application to sell new diesel VW, Porsche and Audi diesel cars and SUVs last year.

The Wall Street Journal on Tuesday quoted the head of VW's North American operations, Hinrich Woebcken, as saying the company could decide to end all U.S. diesel sales. The company on Wednesday did not dispute the comments.

Volkswagen, which was the largest automaker worldwide in sales in the first half of 2016, has agreed to spend up to $10.033 billion in the United States to buy back 475,000 2.0 liter diesel vehicles or fix them if allowed. In total, VW has agreed to spend up to $16.5 billion to date to address claims from states, owners, dealers and regulators.

The company is still in talks with the U.S. Environmental Protection Agency and the California Air Resources Board to win approval for a fix for its polluting diesel vehicles. VW must still reach an agreement on how to address 85,000 larger 3.0 liter SUVs and cars.

It also faces lawsuits from several U.S. states and an ongoing Justice Department criminal investigation.

Prior to the disclose of the illegal software in September 2015, diesel sales accounted for nearly a quarter of VW brand U.S. sales.

(Reporting by David Shepardson; Editing by Phil Berlowitz)

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