VW takes nearly $3B extra charge in emissions scandal
Volkswagen is taking a surprise $2.95 billion charge in the third quarter because the effort to retrofit or buy back U.S. diesel vehicles that were part of an emissions cheating scandal is more complex than expected.
Announced Friday by the German automaker, the added cost could push Volkswagen’s total damages from the scandal past $30 billion.
The charge will take a bite out of the financial results scheduled for release Oct. 27, the Wolfsburg-based company said, as the make-good plan in response to the scandal is “proving to be far more technically complex and time-consuming” than anticipated.
The latest added cost could erase more than half of Volkswagen’s projected $5.3 billion earnings for the third quarter, according to estimates by three financial analysts compiled by Bloomberg.
The scandal involved cheating technology installed on Volkswagen diesel-powered vehicles to circumvent U.S. clean-air emissions standards. In June 2016, Volkswagen agreed to a $14.7 settlement for claims about its U.S. cars equipped with 2-liter diesel engines. The agreement includes plans for buybacks and payments up to $10,000 for each vehicle to owners.
Three months ago, the U.S. Environmental Protection Agency approved planned fixes to Volkswagen’s 2-liter engine diesel cars from 2009 through 2014, including the Jetta, Jetta SportWagen, Golf, Beetle, Beetle Convertible and Audi A3 models.
U.S. vehicles rigged with the emissions-cheating technology represent only part of millions of other Volkswagen diesel cars linked to the scandal worldwide.