Volkswagen, one of the world’s largest automakers has confirmed that it has settled its disputes in the US at a cost of $4.3 billion. They will also be forced to plead guilty to misconduct.
The charges relate to devices that Volkswagen fitted to their fleet of diesel powered vehicles between 2006 and 2015. The settlement comes after VW finally admitted the use of the devices, that were programmed to subvert emissions tests on the vehicles. It is believed that it may have affected 580,00- vehicles in the US alone. This number pales in comparison to the 11 million that are anticipated to have been affected worldwide. The company will now face several cases in different countries. They will also have the future fallout to try and mitigate. Though trust in the automaker will be hard to come by after the truth came out.
VW had agreed to the settlement in order to, at least in America, draw a line under the subject. The company desperately needs to move forward with its next generation of fuel efficient vehicles, after previously announcing that they were finishing with diesel technology. As one of the world’s biggest manufacturers VW are somewhat behind in the electric vehicle market. Though many believe that VW have made some smart investments in the technology and that they will catch up quickly. The emerging market offers lucrative profits to companies that get it right. Though whether those who are more environmentally minded are likely to buy from a company with their recent history is unknown.
The company is also in the process of buying back affected vehicles in the US and fixing them. This process is likely to be hard on profits in the country. There have also been several profit warnings around the giant. The news has done their financials no favours. Their diesel vehicles are a big seller globally, and if the buy back scheme is instituted in several other coutries VW’s very existence could be under threat.
Whilst VW are the biggest, they are by no means the only ones who have tried to subvert the testing. General motors have also been under investigation for software tampering activity. These along with other notable companies such as Fiat are likely to come to the fore once the VW scandal goes away. It will also grow pressure for testing practices to improve significantly.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.