Volkswagen risks $18bn fine over toxic emissions breach

Volkswagen has ordered an external investigation, after US regulators found that its software for diesel cars gave false emissions data, its CEO said yesterday. He said he was “deeply sorry” for the violation of US rules.

“I personally am deeply sorry that we have broken the trust of our customers and the public,” Martin Winterkorn.

“Volkswagen has ordered an external investigation of this matter.”

The US Environmental Protection Agency (EPA) said last week the software deceived regulators measuring toxic emissions, and said Volkswagen could face fines of up to $18bn (€15.9bn) as a result.

“We do not, and will not, tolerate violations of any kind of our internal rules or of the law,” Mr Winterkorn said, adding the company was co-operating with the relevant agencies. He gave no details on who would carry out the external investigation.

“This is not your usual recall issue, an error in calibration or even a serious safety flaw,” Bernstein analysts wrote in a note yesterday.

“There is no way to put an optimistic spin on this, this is really serious.”

Cynthia Giles, an enforcement officer at the EPA, said on Friday that the cars in question “contained software that turns off emissions controls when driving normally, and turns them on when the car is undergoing an emissions test”.

The feature, which the EPA called a “defeat device”, masks the true emissions only during testing.

When the cars are on the road, they emit as much as 40 times the level of pollutants allowed under clean-air rules meant to ensure public health is protected, Ms Giles said.

“We have admitted to it to the regulator. It is true. We are actively co-operating with the regulator,” a spokesman for Volkswagen said yesterday.

Volkswagen could face civil penalties of $37,500 for each vehicle not in compliance with federal clean-air rules. Some 482,000 four-cylinder VW and Audi diesel cars sold since 2008 are involved in the allegations.

If each car is found to be in non-compliance, the penalty could be $18bn, an EPA official confirmed last week.


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