VW Keeps Bet on Diesel after DOJ Charges

The U.S. Department of Justice has announced that they will seek $48 billion in civil penalties against Volkswagen for the company’s alleged violations of emissions rules. Although Volkswagen may pay less than the amount sought, this is in excess of an initial estimate in September when U.S. officials said that Europe’s biggest carmaker could face at least $18 billion in fines.

According to the Justice Department complaint, Volkswagen could face fines of as much as $37,500 per vehicle with an additional $37,500 for each day of violation, as well as an extra $3,750 per “defeat device” installed. The complaint alleges these devices were installed in nearly 600,000 vehicles sold in the U.S.

Despite the landmark penalty sought by regulators, Volkswagen’s CEO, Herbert Diess, says that the company will continue selling diesel-powered cars in the U.S. market in the long term.

Diess said, “I wouldn’t give up diesel, even in the U.S.” He highlighted the long range and high torque of diesel engines, and also stated that diesels can be clean when equipped with the latest emissions technologies.

The Justice Department charges still leave open the possibility of a class-action lawsuit by consumers misled by the claims. Volkswagen would also have to pay to install fixes to affected vehicles, which they have been negotiating with EPA and the California Air Resources Board since November.

If Volkswagen were made to pay the full amount, it would be well in excess of the $900 million General Motors settlement over the ignition scandal and the $1.2 billion Toyota paid for their unintended acceleration controversy. Takata’s defective airbags resulted in a $70 million settlement.

 

Read more about the Department of Justice complaint here: http://www.reuters.com/article/us-volkswagen-usa-idUSKBN0UI1QP20160106

Read more about Herbet Diess’ statement here: http://www.autonews.com/article/20160106/COPY01/301069971/vw-brand-chief-says-diesels-will-stay-in-u-s-lineup

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