VW Facing Penalties, Tumbling Stocks After Diesel Scandal

2015 VW Golf TDI engine (Credit: Volkswagen )

If you’ve been living under a rock, then you probably don’t know that the US EPA has accused VW of cheating on emissions tests for almost 500,000 cars. This is a big problem, one that could carry with it billions of dollars in fines, possible criminal prison for various VW employees, and more.

To give everyone an idea of how big a deal this is, the EPA could levy an $18 billion fine against Volkswagen. That would be a crushing blow to the company, despite its vast resources.

Already, Volkswagen has seen its stocks tumble 23 percent, causing it to close at its lowest point in over three years’ time, according to a report from Bloomberg. That’s some serious financial damage, and the full fallout of the allegations hasn’t even begun. Officials in Europe are working with the United States to fully investigate exactly what happened.

The details of how VW pulled off such a cheat for so many years are still coming out. Regulators know that VW TDI models could tell when they were being tested, emit fewer emissions than in normal operation, and then go back to spewing out between 10 and 40 times the legal amount of pollutants. Most of what the vehicles were sending into the air were nitrogen oxides, which are linked to asthma attacks and other breathing problems. It’s nasty stuff that hurts people, which is why the EPA and the US Department of Justice will likely not be kind toward VW.

There’s been no recall yet, but expect one soon. VW dealerships aren’t selling any 2015 TDIs, and 2016 models will also be held until the EPA can confirm they aren’t designed to cheat the system.

The damage is spreading beyond just VW. Daimler and BMW both saw their stocks slide some on Monday, even though neither one is being investigated for emissions fraud. In fact, a BMW model made it through the same tests as the VW TDIs, with no problems.

Already, there are plenty who want to see diesel use annihilated in the United States, and this controversy is only working to support that cause.