After getting caught red-handed, Volkswagen’s shares have plummeted by more than 20% yesterday, representing the company’s highest one-day decrease ever.
After getting caught red-handed, Volkswagen's shares have plummeted by more than 20% yesterday, representing the company's highest one-day decrease ever.
Volkswagen risks paying a maximum $18 billion fee after EPA found out they rigged emissions tests for 482,000 cars and this had a huge impact on the company's shares which went down by up to 23% in just one day, thus enabling a decrease in market value of €15.6 billion. The stock market closed at €132.2 euros which represents the lowest value in more than three years. It could have been much worse as during the day the value actually dropped to €125.40, but some of the loss was regained later in the day.
In addition, the company could face lawsuits from environmental groups and shareholders while some recent customers have already expressed their desire to get a refund on their cars equipped with the 2.0 TDI engines as they feel they've been betrayed.
Volkswagen of America is no longer selling cars with that turbodiesel engine in United States and according to industry analysts VAG could suffer a global sales decline in the following period after admitting they cheated during EPA tests.
Moreover, the U.S. Justice Department is currently conducting a criminal investigation after EPA discovered cars equipped with the "defeat device" generated 10 to 40 times more pollution above the legal limits, even though the cars passed the official testing. EPA now says they have expanded investigation onto other car makers to find out if this is a more widespread problem.