VW Emission Recall Costs Rise to $18 Billion
April 25, 2016—Volkswagen revealed its diesel emissions cheating will cost the company $18.2 billion for 2015 alone, with even more costs likely to come.
On Friday, the German government said five German brands, including Volkswagen, would conduct voluntary recalls over emissions issues, a day after Mercedes-Benz owner Daimler said it was conducting an internal investigation into its emissions certifications at the request of U.S. authorities.
The Volkswagen announcement follows agreement in a U.S. federal court in San Francisco on the outlines of a deal with U.S. environmental authorities, which stated Volkswagen would offer to buy back almost 500,000 cars sold in the U.S. equipped with software that disabled emissions controls when the car was not being tested. About 11 million cars worldwide are affected.
The company had delayed its earnings announcement until it could get a better estimate of the costs involved. Now that it has revealed the cost of the scandal, Volkswagen said Friday that it is to post a massive net loss of about $6 billion for last year.
Volkswagen also announced it is delaying plans to release the preliminary results of an investigation into its diesel emissions scandal being conducted by Jones Day, the company announced Friday, saying releasing the findings too soon would present “unacceptable risks” for the company.