VW diesel scandal fixing bill hits $30bn
7 October, 2017
The diesel emissions cheating scandal will cost Volkswagen an extra $3bn, because engines are proving “far more technically complex and time consuming to adapt,” the company announced last week. The additional cost, for fixing engines in the US, takes the total bill to more than $30bn. Two years after the problems first emerged, Volkswagen is still struggling to put the crisis behind it.
News of the additional financial burden from dealing with vehicles in the US underlines the difficulty the company is having extricating itself from the scandal. Shares in the German carmaker fell after the announcement, but later recovered most of the lost ground. “This is yet another unexpected and unwelcome announcement from VW, not only from an earnings and cash flow perspective but also with respect to the credibility of management,” Arndt Ellinghorst, analyst at Evercore ISI, said.
Separately, Munich prosecutors made an arrest in connection with the scandal. German media reports have named the person taken into custody as Wolfgang Hatz, former board member at VW unit Porsche. Hatz was head of Research and Development at Porsche and had held other roles in the VW group.