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Volkswagen Dieselgate Cleanup Could Cost Up To $87 Billion

Another day, another Dieselgate story, only this time it could be the one to bury them all. Heck, even parts of Volkswagen itself could fold if it turns out to be true. According to Credit Suisse, a total fix for the emissions scandal could cost the carmaker between $26 billion (23 billion euros) and a jaw-dropping $87 billion (78 billion euros).
2009 Volkswagen Golf TDI 1 photo
Photo: Wikimedia
The lowest estimate is already over three times higher than Volkswagen's approximation, while the highest one is over two times higher than the BP Oil Spill from 2010. As some of you know, Wolfsburg has already set aside $7.3 billion (6.5 billion euros) to deal with upcoming costs of emissions scandal, but that figure may have been overly optimistic according to CNN. That said, VW is well aware that it may need to open its piggy bank a bit more, but not that much. “The numbers ... are pure speculation. The calculations are nonsense,” a Volkswagen representative was quoted by CNN Money.

Credit Suisse figures' are based on many factors, including the recall costs, EPA fines, affected owners reimbursements and also criminal court cases when they will arise. The Swiss financial company also took into account that VW may choose to offer discounts on new vehicles instead of reimbursing the owners of affected models, but that may be a case-by-case scenario.

Either way, if either one these estimates turns out to be true, it would be a huge blow for Volkswagen's Financial Services arm. The branch leases VW AG vehicles, including some of those directly affected by Dieselgate. Credit Suisse says that the situation could be so dire that VW Financial Services may even need an injection of cash from the Group so that it doesn't fold.

Thanks to a number of years of steadily increasing profit, Volkswagen Group has a little over $20 billion (17.8 billion euros) to spare in the case of a terrible emergency, but that still wouldn't be enough to cover all Dieselgate costs if Credit Suisse's guesstimates turn out to become real.
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About the author: Alex Oagana
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Alex handled his first real steering wheel at the age of five (on a field) and started practicing "Scandinavian Flicks" at 14 (on non-public gravel roads). Following his time at the University of Journalism, he landed his first real job at the local franchise of Top Gear magazine a few years before Mircea (Panait). Not long after, Alex entered the New Media realm with the autoevolution.com project.
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