Dieselgate Scandal

VW Taken to Court

VW exhaust DPA Julian Strasenschulte
It's proving difficult for VW to clear the air.
  • Why it matters

    Why it matters

    VW’s bill to settle its diesel emissions-rigging scandal could prove to be much higher than previously thought.

  • Facts

    Facts

    • U.S. environmental regulators in September revealed VW’s diesel emissions scandal, which affects 11 million cars worldwide.
    • The U.S Justice Department and U.S. Environmental Protection Agency accuse Volkswagen of violating four environmental regulations and obstructing investigations.
    • The prosecutors are theoretically demanding up to $48 billion in fines, according to Reuters calculations, much higher than the $18 billion initially estimated.
  • Audio

    Audio

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VW’s managers can’t seem to get a break. One day before Herbert Diess, the head of Volkswagen’s core brand, was set to appear at the Las Vegas Consumer Electronics Show to unveil new electric driving plans, the carmaker was handed yet another dose of bad news from U.S. authorities.

The U.S. Justice Department filed a civil lawsuit against VW on Monday. The complaint, filed in a federal court in Detroit on behalf of the U.S. Environmental Protection Agency, alleges that Europe’s largest automaker knowingly installed so-called defeat devices in almost 600,000 of its diesel cars in the United States. Some 11 million cars around the world carried the devices, VW has admitted.

In its 30-page complaint, the Justice Department said the charges carry fines of between $2,750 and $37,500 per car, per violation. Based on four separate violations laid out in the complaint, VW could theoretically face as much as $48 billion in penalties, according to Reuters calculations, which is higher than the $18 billion estimated when the scandal broke in September.

“This is the worst-case scenario, the most negative number possible, but these are more fictional amounts,” said Sascha Gommel, chief auto analyst at Commerzbank in Frankfurt. “The likelihood that it will be so high is very, very low in my view.”

Volkswagen preference shares fell to a 3-week low on the Frankfurt Stock Exchange, dropping 3.4 percent on Tuesday morning. The stock lost the most on the German blue-chip DAX index.

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