Volkswagen To Announce Emissions Fix Plans In “Next Few Days”

Since the Environmental Protection Agency revealed earlier this month that Volkswagen had rigged its so-called “clean diesel” vehicles to cheat on emissions tests, owners of the approximately 11 million cars affected by this trickery have been waiting to find out when they might hear something other than apologies from the German carmaker.

According to Reuters, VW’s new CEO Matthias Mueller has declared that a proper plan for refitting this huge number of problem cars will reach out to affected owners “in the next few days” with information on having their vehicles’ software updated.

These cars were rigged with “defeat device” programs that could detect when a car was undergoing an official emissions test. A car’s full emissions control system would only turn on during these tests, meaning the test results were not always indicative of the vehicle’s emissions during regular use. In fact, according to the EPA, some cars were emitting toxins at around 40 times the allowable level.

Reuters reports that VW’s announcement did not provide details on exactly how the recall fix will work or what the end result will be for the fuel efficiency and emissions of the affected vehicles.

Given that many owners of VW’s line of “clean diesel” cars bought them because they were both fuel efficient and environmentally friendly, they may not be pleased with a “fixed” car that gets worse mileage or puts the vehicle just on the compliant side of EPA emissions standards.

VW has set aside around $7.3 billion to pay for the projected costs associated with this egg-on-face publicity disaster, but the costs could end up being even larger.

First, the company faces potentially billions in penalties from U.S. regulators alone. If the EPA seeks the maximum fine for each violation of the Clean Air Act, VW could be on the hook for around $18 billion.

There is also the possibility of multimillion, perhaps billion, dollar settlements to close federal criminal probes and state-level violations. Not to mention the class-action civil suits filed by owners of affected VWs.

Beyond all that is the damage to the company’s reputation. Even though VW only rigged around 500,000 vehicles in the U.S., the fact that a carmaker would deliberately attempt to deceive consumers and regulators may cast a pall over the entire line of VW cars for some time to come.

Investors have been dumping VW stock since the Sept. 18 EPA announcement. The share price for VW currently sits at around $97/share, down from nearly $170 two weeks ago. The company’s stock price hit had actually hit a record high of $262 in the spring of 2015.