A Switzerland-based finance company estimates that Volkswagen’s worst case scenario from the diesel scandal will cost it $87 billion.
Credit Suisse considered the cost of fixing the emissions problems, reimbursing owners and settling civil and criminal court cases in coming up with the maximum $87 billion total and estimates that the most conservative estimate of the cost would be around $26.8 billion. The German automaker has put aside $7.3 billion to deal with what’s to come as a result of admitting that it cheated on diesel emissions tests. A spokespreson did respond to Credit Suisse’s estimates, saying that the “numbers are pure speculation” and that the “calculations are nonsense.”
The bank’s analysts say the single biggest cost potentially comes from having to compensate owners for the loss of value to their vehicles. The German automaker may try to keep costs down by offering discounts on new vehicles to affected customers rather than reimbursing them with cash.
Volkswagen faces a potential maximum fine of $18 billion from the Environmental Protection Agency (EPA) and has already been named in numerous class action lawsuits.
[Source: CNN Money]
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