Photo: screenshot
It seems like what Volkswagen did with its US-bound diesel engines will take a bigger toll on the company than previously thought. After the EPA announced that it’s suspecting the company of wrongdoing and basically cheating on the CO2 emission tests, the German group is seeing the other side of the coin, upon admitting things weren’t exactly crystal clear before.
In a press conference held earlier today, Volkswagen CEO, Mr. Winterkorn apologized for taking advantage of the public’s trust and said that the thing that hurts the most is the fact that some customers felt like they were scammed.
While it all may seem like a bold step towards redemption, the stock market reacted a lot more violently than anyone predicted, the Volkswagen shares taking a hit of 23% today alone, marking one of the lowest points in its history. Translated into actual money, that’s a drop in value of $17.6 billion or €15.6 billion in the local currency of the German brand.
Chip in the fact that the shares weren’t doing too good in the first place and we get to an overall drop of 31 percent since January 2015, a number that should give the CEO a thing or two to think about.
In the meantime, the first signs of trying to patch things up are already noticeable, VW stopping the sale of any car fitted with the 2-liter 4-cylinder diesel TDI engine in the US. That includes the 2015 Jetta, Beetle, Golf, Passat and Audi A3 TDI.
Furthermore, Winterkorn said that his company will work closely with the authorities to make sure everything is done by the books, but the bigger problems for him will come later this week. On Friday, the supervisory board of the company will be summoned to vote on a contract renewal proposition, one that may not happen given the current situation.
BMW AG and Daimler AG have come out and said that their cars have nothing to do with this situation and that they never did anything remotely similar to their own products but even so, their stock also took a hit on the stock market today.
Nearly 500,000 cars are said to have tricked the testing system for CO2 emissions and if it comes down to a fine (which is rumored to be over $35,000 for each car) the Germans might be in for a real desperate outcome and a record-breaking sum close to $18 billion.
As for the way they tricked the tests, the cars were fitted with a software that would turn on full pollution controls when tested, dropping the emissions drastically. Basically, the vehicles would pollute 10 to 40 times the legal limits.
The whole scheme was unfolded when the International Council on Clean Transportation carried out real-world emission tests of diesel vehicles and compared them to lab results.
While it all may seem like a bold step towards redemption, the stock market reacted a lot more violently than anyone predicted, the Volkswagen shares taking a hit of 23% today alone, marking one of the lowest points in its history. Translated into actual money, that’s a drop in value of $17.6 billion or €15.6 billion in the local currency of the German brand.
Chip in the fact that the shares weren’t doing too good in the first place and we get to an overall drop of 31 percent since January 2015, a number that should give the CEO a thing or two to think about.
In the meantime, the first signs of trying to patch things up are already noticeable, VW stopping the sale of any car fitted with the 2-liter 4-cylinder diesel TDI engine in the US. That includes the 2015 Jetta, Beetle, Golf, Passat and Audi A3 TDI.
Furthermore, Winterkorn said that his company will work closely with the authorities to make sure everything is done by the books, but the bigger problems for him will come later this week. On Friday, the supervisory board of the company will be summoned to vote on a contract renewal proposition, one that may not happen given the current situation.
Unexpected consequences
While at first, only Volkswagen might seem affected by this new scandal in the auto industry, there are a couple of surprising things happening as we speak that nobody expected.BMW AG and Daimler AG have come out and said that their cars have nothing to do with this situation and that they never did anything remotely similar to their own products but even so, their stock also took a hit on the stock market today.
Nearly 500,000 cars are said to have tricked the testing system for CO2 emissions and if it comes down to a fine (which is rumored to be over $35,000 for each car) the Germans might be in for a real desperate outcome and a record-breaking sum close to $18 billion.
As for the way they tricked the tests, the cars were fitted with a software that would turn on full pollution controls when tested, dropping the emissions drastically. Basically, the vehicles would pollute 10 to 40 times the legal limits.
The whole scheme was unfolded when the International Council on Clean Transportation carried out real-world emission tests of diesel vehicles and compared them to lab results.
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