VW admits to fraud with 11 million cars

Not 482,000 cars, but 11 million

Yesterday’s news quoted 482,000 cars in the United States alone, but Volkswagen has now admitted some 11 million cars on a worldwide scale – across several brands – have this technology in place. All cars with a Type EA 189 diesel engine have this “cheating” software.

In a press release earlier today, Volkswagen said it was working “full speed” to correct the “irregularities” and to get rid of these abnormalities. The group also stated its new diesel engines all meet the legal environmental regulations.

6.5 billion euro set aside

To cover the costs for this environmental scandal and to gain back the trust of its customers, Volkswagen will set aside 6.5 billion euro in its third quarter and if necessary, it will adjust that figure, it said in a press release.

The scandal means that its 2015 results will be markedly lower than forecast and the backlash followed immediately: the share dropped 18 % yesterday and it plummeted another 20 % today. Rumours now indicate that VW CEO Martin Winterkorn will be forced to resign on Friday, according to insider information obtained by the German paper Tagesspiegel.

Not only Volkswagen’s shares have suffered because of the scandal, as other car manufacturers also feel the brunt. Environmental organisations and consumer organisations have long suspected the car industry to “cheat” this way. Following Germany’s example, France has now asked for a thorough investigation into Europe’s car industry, while South Korea and Australia have also launched investigations.