It doesn’t pay to cheat. That’s the moral of Volkswagen’s ongoing emissions-cheating scandal after the carmaker announced Thursday that its tab for fixing vehicles, compensating owners, and paying fines to federal regulators in the U.S. could exceed the $18 billion previously earmarked to address the scandal.
VW executives warned in an annual earnings report [PDF] Thursday that the company could face “further significant financial liabilities” as it continues to work with regulators in several countries to address the scandal that affects more than 11 million vehicles worldwide.
The company’s tab in the U.S. alone will likely exceed the $18 billion the carmaker deducted from last year’s earnings to cover costs of the scandal.
VW estimates that it will spend nearly $8.8 billion to pay for fixes and provide buybacks for the more than 500,000 vehicles equipped with “defeat devices” designed to cheat federal emissions tests in the U.S., per a settlement the company entered into with federal regulators last week.
In addition to the buybacks and fixes, the Environmental Protection Agency tells the Associated Press that it could levy fines totaling up to $18 billion against the carmaker.
VW CEO Matthias Mueller said on Thursday that fixing the emissions-cheating vehicles “will remain our most important task until the very last vehicle has been put in order.”
But to do so, the company may have to find additional funds, which the report suggests “may lead to assets being sold.”
Analysts tell Reuters that those actions could include the sale of VW’s truck business. However, Mueller told reporters on Thursday that that option was not currently under consideration.
Despite the ongoing scandal and pending lawsuits, Mueller stressed that the company’s car business remains “fundamentally sound.”
VW says emissions scandal bill could get much bigger [Reuters]
Volkswagen CEO Apologized in Person to Obama Over Scandal [The Associated Press]
by Ashlee Kieler via Consumerist