Key questions behind Volkswagen emissions scandal

Volkswagen announced on Tuesday the initial results of an internal investigation into the claims that its diesel cars were fitted with software in the dupe emissions tests.


Now the automaker is admitting that some 11 million VW and Audi vehicles worldwide showed similar emissions issues. The U.S. Justice Department, the California Air Resources Board and German authorities are also investigating.

Earlier, the boss of Volkswagen’s United States business, Michael Horn, admitted the firm “totally screwed up”. Winterkorn said, “I personally am deeply sorry that we have broken the trust of our customers and the public”.

CEO Martin Winterkorn apologized for the deception under his leadership and pledged a fast and thorough investigation, but gave no indication that he might resign. Republican Sen. Bo Watson of Chattanooga, a vocal critic of Volkswagen’s labour policies, on Tuesday cited the state’s “significant investment” into the plant in calling for the Senate Finance Committee to investigate the potential of revelations that VW used secret software thwart pollution controls.

Afterwards, the software switched off again, enabling the cars to drive more powerfully – while emitting up to 40 times the legal nitrogen oxide limit.

At least 482,000 cars are to be recalled and VW could face penalties of more than $18bn in the USA alone.

The reputational damage to Volkswagen is implicit in the market’s response. Volkswagen’s share price slid a further 16.2 percent Tuesday to a near four-year low of 112 euros.

VW conceded that the costs it is booking in the third quarter are “subject to revaluation” in light of its investigations and that 2015 earnings targets will be adjusted. The company is setting aside $7.3 billion (about nine months’ profit) to pay for the mess, including anticipated fines.

A stunning admission from Volkswagen that it intentionally cheated emissions tests could cost the company billions of dollars and torpedo consumer confidence in the brand, experts said.

The EPA said Monday that it will screen for defeat devices in other manufacturers’ diesel vehicles now on the road, although it declined to identify the automakers whose vehicles will be tested.

“‘We’ll see what happens over the next few days and weeks”, said Pete LaFlamme of San Diego, who until last week was a proud owner of a VW-made Audi diesel.

Across the sector, investors wondered how far this scandal could grow.

VW recently overtook Toyota to become the world’s top-selling auto makers.

“The transport minister is in close contact with the company, and I hope that the facts will be put on the table as quickly as possible”, Markel said.

Other countries, such as South Korea, have also ordered investigations into emission levels of VW cars and some law firms in North America have filed class action lawsuits.


“These Volkswagen vehicles should never have been sold, and certainly should not have spent the past six years on American roads polluting our air”, said Eric Gibbs, one of the founding partners of Girard Gibbs and the lead attorney on the case.

VW shares plunge 20 pct on emissions scandal