Volkswagen thinks emissions scandal could cost it $7.3 billion
After admitting it had altered software to misreport the emissions of its diesel cars, Volkswagen is allocating some serious money to help it save face. The company said today it's set aside a whopping 6.5 billion euros ($7.3 billion) to "cover the necessary service measures and other efforts to win back the trust of our customers." The US Environmental Protection Agency had previously found that the carmaker was utilizing a "defeat device" (software tricks) that would detect when a car was being tested and enable its full emissions control systems. However, once returned to normal mode, a confirmed 11 million Volkswagen and Audi models sold from 2009 emit high levels of nitrogen oxide, which aids air pollution and can cause respiratory issues.
Volkswagen says it is "working at full speed to clarify irregularities" with the software used for its diesel engines, which relate to cars with its Type EA 189 mechanism. While it maintains that the software doesn't affect the majority of these engines, "the amounts estimated may be subject to revaluation."
Authorities in the US, Germany, France, South Korea and Italy are conducting their own investigations into Volkswagen's apparent rigging of diesel engines. The car company has already recalled 500,000 vehicles, and also faces additional fines (and class-action suits) that could add up up to billions of dollars. That suggests Volkswagen's balance sheet allocation will be just a portion of the total amount it will spend righting its wrongs.
[Image credit: Glenn Scott, Flickr]
