What the Diesel Scandal Means for the Future of Volkswagen

Posted By Kil Mallock on Sep 29, 2015 | 0 comments

Since the Volkswagen scandal became public, the future of the large German automotive company was unclear. Volkswagen admitted to installing “defeat devices” in over about 500,000 US vehicles and 11 million worldwide, which enabled their vehicles to detect when emission tests were being performed and reduce the amount of pollutants emitted during the test. However, when the cars were actually being driven on the road, the cars could emit up to 40 times the legal amount of pollutants.

Amid the scandal, Volkswagen’s CEO Martin Winterkorn has already resigned and stock prices have plummeted 30 percent. In addition, although Volkswagen has already set aside $7.3 billion to alleviate the scandal, they may face more substantial fines. Since VW knowingly violated the Clean Air Act, they could face a fine of up to $37,500 for each of the 482,000 affected US vehicles—adding up to more than $18 billion. Volkswagen also faces countless lawsuits from furious owners of the affected vehicles, who bought the models specifically for their supposed friendly impact on the environment.

Investigations are still underway against Volkswagen. If it is revealed that company officials knew about or concealed the scandal, criminal charges may also be a possibility. Perhaps the most damaging aspect of the scandal is the large stake Volkswagen placed on their clean diesel vehicles to establish their brand. VW was one of the first companies to offer clean diesel vehicles that accounted for a large percentage of their sales in the past year. Owners of these vehicles are expressing their outrage publicly at the company and complaints against the company continue to pile up. Needless to say, VW’s future reputation and the impact of the scandal on their sales are unclear. Although dealers have been ordered to halt sales of affected vehicles, no official recall has been made yet.

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