VW’s emissions scandal bill hits $30bn

Amid arrests, falling share prices and continued uncertainty, Volkswagen’s bill from the ongoing emissions scandal has reached USD$30 Billion.

Reuters reports that on Thursday, German prosecutors arrested Wolfgang Hatz, the first top executive within the group to be detained amid a widening probe into cheating at VW’s Audi brand.

Wolfgang Hatz, arrested on Thursday by German prosecutors for his senior level role in VW’s emissions cheating scandal.

VW’s growing financial woes and Hatz’s arrest were also discussed on Friday at a regular meeting of the carmaker’s supervisory board, one person familiar with the matter said.

VW shares fell as much as 3 per cent on Friday, as traders and analysts reacted to the continuing fallout from the scandal.

VW, Europe’s biggest automaker, admitted in September 2015 that it had used illegal software to cheat U.S. diesel emissions tests, sparking the biggest business crisis in its 80-year history. Before Friday, it had set aside 22.6 billion euros ($26.7 billion) to cover costs such as fines and vehicle refits.

Last year, VW agreed with U.S. authorities to spend up to $15.3 billion to buy back or fix up to 475,000 2.0-litre polluting diesel cars.

On Friday, VW said it was extending the timeline and setting aside an additional 2.5 billion euros (USD$3.0 billion) as hardware. VW says the complications will amount to 5,200 euros per car.

“We have to do more with the hardware,” a VW spokesman said.

In Europe, where only a software update is required for the 8.5 million affected cars, plus a minor component integration for about 3.7 million 1.6-litre vehicles included in that number, fixes are running smoothly, the spokesman added.

The additional provision will be reflected in third-quarter results due on October 27, VW said.

 

 

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