Volkswagen Could Face $18 Billion Fine Over Emission-Cheating Software

After getting caught cheating on emissions testing by means of software, Volkswagen could face up to $18 billion in fines, reports USA Today. That number is based on the company being assessed the maximum penalty of $37,500 per affected vehicle. That's not the only bad news for Volkswagen, which has halted sales of its 4-cylinder diesel cars; the linked article reports that the violations "could also invite charges of false marketing by regulators, a vehicle recall and payment to car owners, either voluntarily or through lawsuits. Volkswagen advertised the cars under the 'Clean Diesel' moniker. The state of California is also investigating the emissions violations."

Comments

23% of the company

[crow]

For reference, $18B would be about 23% of the market cap of the company. In other words, if the company were to pay such a fine by issuing new stock and giving the stock to the government, the government would end up with 23% of the company (or so goes the math if the stock market were being logical).

That's not what's going to happen, but it shows that the company should be able to raise the money to pay the fine if it comes to it. Of course, such things usually take many years of lawsuits and appeals before it's all settled, which is why these things often are settled out of court for a lower price.

Re:23% of the company

[fuzzyfuzzyfungus]

Plus, aren't all those customers now stuck with cars that are either not street legal(I know that pre-emissions-standards vehicles were grandfathered; but these aren't) or will absolutely suck once they get reflashed so that the 'clean' ECU parameters run all the time, rather than just during testing(I'm assuming that something about the test-mode parameters was lousy, or they would have had no incentive to try this little trick)?

That seems like the sort of thing that might make them justifiably unhappy, and in a way with a relatively large, and relatively easily quantified, dollar value attached.