Volkswagen to Spend $7.3 Billion to Fix 11 Million Cars Affected in Diesel Cheating Scandal


A scandal that has undermined Volkswagen in the United States spread to its core market of Europe on Tuesday, after the company said that 11 million of its diesel cars worldwide were equipped with software that was used to cheat on emissions tests.

Volkswagen did not provide information on where the affected cars are, but the overwhelming majority are probably in Europe, where the company dominates the market and accounts for more than one of every four cars sold.

The German automaker said it was setting aside the equivalent of half a year’s profits — 6.5 billion euros, or about $7.3 billion — to cover the cost of fixing the cars to comply with pollution standards and to cover other expenses, which are likely to include fines as well as responses to civil lawsuits from angry customers.

The carmaker’s statement was its first admission that diesel cars outside the United States may contain the software that led the Environmental Protection Agency to accuse the company of deliberately evading pollution tests. Previously, Volkswagen had acknowledged only that the problem affected about 500,000 vehicles in the United States.

The tampered vehicles use what is known as Type EA 189 engines, which are 2-liter engines. The company said on Tuesday that “a noticeable deviation between bench-test results and actual road use was established” for the engines.

Volkswagen said it would also make “other efforts to win back the trust of our customers.”

The number of cars involved suggests that the scale of the damage to Volkswagen’s reputation and its financial standing may be even greater than thought.

Volkswagen shares fell by nearly 18 percent through late-afternoon trading in Frankfurt on Tuesday, after falling by 16 percent on Monday.

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The New York Times

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