German authorities slapped Volkswagen (VW) with a one-billion-euro fine — that’s around $1.16 billion — for diesel emissions cheating. The fine follows a 2017 plea agreement in the U.S.; the car company then agreed to pay $4.3 billion over the emissions scandal. VW said in a statement that it will accept the new fine.
The public prosecutor in Braunschweig, Germany fined VW with one of the highest ever fines German authorities have imposed against a company, Reuters reported. The public prosecutor’s investigation found monitoring duties were breached in the Powertrain Development department, and impermissible software functions were installed in 10.7 million vehicles from 2007 to 2015. The fine doesn’t address claims made by car owners or civil claims.
The car company said in its statement, “Following thorough examination, Volkswagen AG accepted the fine and it will not lodge an appeal against it. Volkswagen AG, by doing so, admits its responsibility for the diesel crisis and considers this as a further major step towards the latter being overcome.”
Evercore ISI analyst Arndt Ellinghorst told Reuters, “Paying out one billion euros is extreme painful, but in the broader context it isn’t a material number,” pointing to the company’s net cash position of 24.3 billion euros following the first quarter.
Reuters reported Germany’s automobile industry has been plagued by the emissions crisis — earlier this week, Germany’s government ordered Daimler to recall almost 240,000 cars outfitted with unlawful emissions-control devices; around 774,000 models have been affected in Europe. Also this week, Munich prosecutors broadened an emissions cheating probe into Audi, VW’s luxury brand, and included CEO Rupert Stadler with suspects accused of false advertising and fraud. Braunschweig prosecutors are still investigating new VW CEO Herbert Diess and chairman Hans Dieter Poetsch for suspected market manipulation. Stuttgart prosecutors are separately investigating Poetsch for the same suspicions.
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