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Dieselgate could cost Volkswagen up to €78 billion

Snapshot: According to an estimation made by Credit Suisse

The ongoing scandal regarding Volkswagen’s illegal software implementation on almost 11 million diesel cars could have a huge financial impact as according to the estimations made by Credit Suisse, the cost could reach €78 billion. This would be a worst case scenario while the most conservative estimation stands at €23 billion which is still a lot of money even for such a large automotive conglomerate like the Volkswagen Group.

As a reminder, Volkswagen admitted a few weeks ago the EA189 engine available in 1.2 TDI, 1.6 TDI and 2.0 TDI displacements has a special software developed by Bosch that is only activated during emissions tests to enable the cars effectively cheat as in real life - when the software is off - the car’s emissions are much higher, estimated at up to 40 times in some cases.

Volkswagen has already started to lose a lot of money since all of the unsold Euro 5 cars with this engine are now blocked at dealers until further notice. The company has announced all of the 11 million cars affected will be the subject of a recall which will obviously generate a huge bill while the upcoming fines will greatly affect VAG’s budget.

In addition, the brand’s imagine has been affected as well and chances are Volkswagen and its sub brand Skoda, Audi and SEAT will likely suffer as well from declining sales since many people don’t trust VAG anymore after finding out it betrayed their customers, some of which have already expressed their intent to sue the company and demand compensations.

Volkswagen has allocated €6.5 billion which probably won’t be enough to handle all these problems and they know this since according to sources within the company they are looking for ways to cut costs in order to have more funds at disposal to deal with the dieselgate saga. 

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