VW AG, the world’s largest automaker by sales, has recently acknowledged it had rigged diesel emissions tests in the US, with about 11 million autos affected worldwide and its shares went down faster than a fighter jet.
Having ripped through a third of its market value might not be enough for the largest crisis faced by the 78-year company, as we can also tally the amounts the group will have to pay – without even factoring in the probable plunge in car sales and prices. First off, on September 29 Volkswagen announced it would recall around 11 million autos around the globe for a fix to the illegal software system and analysts believe the bill from this move alone could be at least $6.5 billion. Regulators around the world aren’t sitting idle also, some of them issuing a stop sale order (Switzerland) and others ready to factor in massive penalties – the US Environmental Protection Agency announced back on September 18 the cheating could lend penalties against the company worth up to $18 billion.
California – the most populous state in the US and the one that is the most careful with its environment – has announced it was devising a key enforcement action against the German carmaker, with analysts believing it could start a lawsuit under the US Clean Air Act. And prosecutors at home in Germany are also investigating allegations of fraud while other countries are also weighing their options. State governments are also mulling a return of their subsidies delivered to the company for the vehicles equipped with the illegal engines. Meanwhile, lawsuits and class actions are mounting all around from Germany to the US, as investors, dealers and citizens are asking for compensation.