Volkswagen shares fall after new emissions revelation

A few days later, Volkswagen admitted the software was on 11 million vehicles worldwide. Volkswagen denied the allegation.

Moody’s said in a statement that the downgrade “reflects mounting risks to Volkswagen’s reputation and future earnings” following a company announcement Tuesday that the company uncovered irregularities in carbon dioxide emissions levels.

VW is Europe’s biggest motor manufacturer, employing more than 750,000 people in Germany, and has been a symbol of the nation’s engineering prowess.

Approximately 10,000 Volkswagen, Audi and Porsche vehicles on the road featured the illegal software, according to the EPA.

Transport Minister Alexander Dobrindt noted that Germany’s auto tax is calculated on the basis of engine size and carbon dioxide emissions, and so “if these vehicles emit more CO2, over and above the respective limit, that makes a new calculation necessary”. An Audi spokesperson stated they are determining how many of their vehicles are effected by the new development. EPA revealed that it has found similar defeat device on 3.0 diesel engines, which were being used in Volkswagen’s SUVs Touraeg, Porsche’s Cayenne, Audi’s Q5 and Q7, and Audi’s A6 and A8 luxury sedans. As such, a recall for the 800,000 cars is not now planned.

The company said that it “will immediately start a dialogue with the responsible type approval agencies regarding the consequences of these findings”.

The scandal has damaged the brand and drawn anger from customers who bought diesel cars thinking they were clean. It’s also draining Volkswagen’s treasury. But that’s likely to rise as lawsuits mount. It led to VW adding €2 billion (S$3.1 billion) to its expected costs from the scandal, and is the first time petrol cars have been drawn into the crisis.

The widening scandal prompted Moody’s Investors Service to cut Wednesday the rating on the Volkswagen’s debt. The agency said the vehicles it tested had nitrogen-oxide emissions up to nine times the allowable standard.

The company’s stock plummeted 9.5 percent to $100.45 amid news of the sales halt.

Not much at this point. Until then, VW tells owners to keep driving the cars.

Dobrindt said if the Carbon dioxide emissions levels of the cars involved are raised, the automobile tax levied on the cars also would go up and they could be levied retroactively.

It is yet to say if it will pay compensation to owners.