LONDON — Volkswagen, the world’s biggest automaker, is in crisis over its rigging of diesel engine emissions tests in America and Europe. If you’re just catching up to it, here are the latest developments — and what you need to know.
1) Volkswagen is preparing a fix to “correct the emissions characteristics” of as many as 11 million diesel vehicles worldwide in the coming weeks and months. It will present technical details to appropriate authorities in October. Germany has about 2.8 million of the affected vehicles, the U.K. has about 1.2 million and France has nearly one million.
2) German prosecutors are investigating former CEO Martin Winterkorn for possible fraud related to selling cars with falsified emissions data. Winterkorn has denied any wrongdoing but took responsibility for the scandal when he resigned last week. Matthias Mueller, the head of Porsche, was named as his successor.
3) The group was found to have falsified U.S. pollution tests on 500,000 diesel engine vehicles, by installing software (“defeat devices”) to make them appear cleaner than they were when being tested. Once on the road, the cars would pump out as much as 40 times the allowed level of nitrogen oxides.
4) In total, about five million VW branded cars, including some Tiguan models, and 1.8 million VW light commercial vehicles are affected worldwide. Other group brands such as Audi (2.1 million cars), Skoda (1.2 million cars) and Seat (700,000 cars) are also involved. In the U.S., the affected cars include Volkswagen’s Jetta, Beetle, Golf and Passat, as well as the Audi A3, for various model years since 2009.
5) Volkswagen’s scheme was discovered last year by a West Virginia laboratory that was commissioned by a clean energy advocacy group that had raised questions about emission levels in diesel vehicles. For more than a year, VW argued to U.S. officials that it was not doing anything wrong. Only recently did VW admit to them that it had installed “defeat devices” in the cars to get around emissions standards.
6) The company has been ordered to recall the 500,000 cars in the U.S., and it has suspended sales. U.S. regulators say the cars are safe to drive and recommend, for now, that owners do nothing differently. But eventually the cars will need to be repaired so they can pass emissions test without cheating.
7) Western Europe is the most important market for Volkswagen — around one in four new cars is made by the group. Authorities in the European Union have urged national governments to conduct investigations.
8) Volkswagen is facing heavy fines. It has already set aside 6.5 billion euros ($7.3 billion) to cover recalls and other costs. But the bill is likely to rise. U.S. authorities could in theory impose up to $18 billion penalties for breaching the emission limits. Germany could also slap Volkswagen with fines, and owners, dealers and investors will want compensation.
9) Volkswagen has promised to work with German prosecutors on a criminal investigation. Employees held responsible could be prosecuted for fraud. If convicted, they face big individual fines and could be sentenced to a maximum of 10 years in prison.
10) About a third of the company’s market value has been wiped out since the scandal broke. That means big losses for powerful shareholders such as the Porsche family, Qatar and the German state of Lower Saxony.