While the approximately 482,000 VW and Audi cars in the U.S. affected by the EPA's allegations are far fewer than the millions recalled in the largest campaigns, the costs could be far greater.
In the quest to create "clean diesel" cars with both high fuel efficiency and low emissions, VW seems to have found a short-cut: cheating. According to EPA documents, the company admitted to using software to game emissions tests, keeping emissions within legal limits during laboratory conditions but exceeding them by as much as 35 times out on the road.
The understandably irate EPA has the power to fine the company as much as $18 billion—more than six times the company's net profit in 2014. Citing anonymous sources, Bloomberg reported Monday that VW was under a criminal investigation by the Justice Department in association with skirting the emissions testing. On Tuesday, VW acknowledged another 11 million diesel cars worldwide were installed with the same software. Some 6.5 billion euros ($7.3 billion) have been set aside to deal with the cleanup, VW said in a statement.
And the damage isn't a one-time problem. Not only could the company's reputation be seriously harmed, but the company has thousands of TDI clean diesel cars that can't be sold. Those models accounted for 22 percent of Volkswagen of America sales last year.
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