Volkswagen Admits to More Fraud

Now, however, VW is reporting that around 800,000 cars, mostly with 1.4-litre diesel engines, may have an issue with their carbon dioxide emissions as well.

Volkswagen, a champion of German industry, has admitted that up to 11 million diesel vehicles worldwide have been fitted with the so-called defeat device.

US regulators said on Monday that about 10,000 VW cars in the United States – including a few Audi and Porsche models – were equipped with auxiliary emission control devices (AECD) that masked the fact that the cars could emit up to nine times the allowed amount of smog-causing nitrogen oxide. They include the 2013 Audi Q7, the 2014-2015 Audi A6, A7, A8, Q5 and Q7 and the 2013-2016 Volkswagen Touareg.

The levels of Carbon dioxide emissions by vehicles in Europe are tied to the level of their taxation at the time of purchase per European Union regulations, with VW AG estimating its financial exposure as a result of these discrepancies at 2 billion euros, which is approximately $2.2 billion.

The admission about fuel consumption was the first that threatened to make a serious dent in VW’s sales since the scandal erupted as it could deter cost-conscious consumers, analysts said.

The shares of the carmaker declined 4.02 euros, or 4 percent, to 96.43 euros at 3:42 p.m.in Frankfurt. This is in addition to the $7.3 billion it has set aside to clear the diesel scandal.

The EU’s executive Commission told Volkswagen to speed up its investigation, which is being led by law firm Jones Day. “Public trust is at stake here”, EC spokeswoman Lucia Caudet said. “We expect that for these cases the auto tax will need to be adjusted”, he said. Nitrous oxides are a toxic pollutant produced by diesel engines.

This is because tackling CO2 – a greenhouse gas blamed for climate change – is becoming a rising priority in many countries, especially in Europe, where cars are often taxed according to their carbon emission levels.

In talks with the authorities – whom Volkswagen did not identify – the company said it hoped to come up with a “reliable assessment of the legal, and the subsequent economic consequences, of this not yet fully explained issue”. Up until now, the scandal had only involved diesel engines.

Their comments were underscored on Wednesday when Moody’s, the USA credit rating agency, downgraded VW’s debt, echoing a similar move by Standard & Poor’s last month.

VW CEO Matthias Mueller has promised the company will “relentlessly and completely clarify the matter”.