(Adds VW spokesman's statement, details from EPA, background, byline)
By David Shepardson
WASHINGTON, Aug 30 (Reuters) - Volkswagen AG must forfeit greenhouse gas emissions credits and is lowering the fuel economy ratings on 98,000 vehicles after the U.S. Environmental Protection Agency said auto software overstated real-world performance.
Volkswagen said Friday it had agreed to a $96.5 million court settlement, with no fine, to reimburse affected customers.
The software was on roughly 1 million 2013-2017 model year Audi, Bentley, Porsche and Volkswagen vehicles, the agency said. It caused the transmission to shift gears in a manner that sometimes optimizes fuel economy and greenhouse gas emissions during the EPA-prescribed emissions test, but not under normal driving conditions, the agency said.
The vehicles getting lower ratings include versions of the Audi A8, Bentley Continental GT, Porsche Cayenne and VW Touareg. Not all of the five model years are covered by the settlement.
The EPA said Volkswagen has determined the software lowered the fuel economy rating on roughly 98,000 vehicles by about one mile per gallon.
The issue was discovered during an investigation by the EPA and California Air Resources Board into excess diesel emissions in hundreds of thousands of U.S. vehicles.
The German automaker admitted using illegal software to cheat U.S. pollution tests in 2015, triggering a global backlash against diesel vehicles that has so far cost it 30 billion euros ($33 billion) in fines, penalties and buyback costs. In May, it set aside an additional 5.5 billion euros in contingent liabilities.
The EPA said Volkswagen understated greenhouse gas emissions by about 220,000 metric tons and it will forfeit EPA credits and credits in the federal Corporate Average Fuel Economy program. The exact amount of credits will be subject to approval by EPA and the National Highway Traffic Safety Administration.
The issue reduced fuel economy by about 3.5% on impacted vehicles, VW said, adding customers will receive payments of $5.40 to $24.30 for each month the vehicle is owned or leased.
"Volkswagen is committed to providing customers with transparent fuel economy data for our vehicles, in line with U.S. labeling requirements," said VW spokesman Pietro Zollino.
The company added the settlement "removes the uncertainty of protracted litigation and does not include any admission of liability or wrongdoing by Volkswagen." (Reporting by David Shepardson Editing by Chizu Nomiyama and Richard Chang)