VW slapped with new $3bn penalty over diesel emissions scandal

Sep 30, 2017, 15:43
VW slapped with new $3bn penalty over diesel emissions scandal

Munich prosecutors on Wednesday arrested former Volkswagen engineer Wolfgang Hatz, the second person detained in the widening probe into cheating at the automaker's Audi division. As Reuters reports, VW shares fell as much as 3% on Friday, as traders and analysts expressed dismay that the company was still booking charges for the scandal.

"The new write-down comes as may investors had hoped the financial fallout from the scandal was in the company's rearview mirror", Fox Business said, adding that the more VW spends on "Dieselgate", the less it has to invest in new technology as it tries to shift from combustion engines.

Stock prices of Volkswagen fell sharply Friday after a surprise announcement of another $3 billion charge related to the company's massive USA diesel emissions scandal.

German weekly Der Spiegel reported today that VW could face further scrutiny because it failed to properly inform U.S. regulators about changes to emissions control software in almost one-half million cars with gas engines.

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Volkswagen will release its third-quarter earnings on October 27.

In late 2016, Volkswagen pleaded guilty to conspiracy to defraud the USA government over the diesel scandal and agreed to pay almost $25 billion in fines, penalties and compensation, after it settled a number of civil lawsuits.

USA vehicles rigged with the emissions-cheating technology represent only part of millions of other Volkswagen diesel cars linked to the scandal worldwide.

Analysts estimate that diesel scrappage in Germany could cost Volkswagen up to another EUR1.2 billion. The fix is taking longer and some cars had to be worked on a couple of times.

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Volkswagen says it expects to take charges of about United States dollars 2.9 billion in the third quarter to cover the costs of buying back and retrofitting diesel cars in North America.

At the Frankfurt motor show earlier this month, Volkswagen outlined plans to move away from combustion engines with electrified variants of all 300 models in the 12-brand group's lineup.

Separately Munich prosecutors made an arrest in connection with the scandal.

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