Volkswagen stock plunges after emissions probe – USA TODAY
Volkswagen’s stock plungedÂ 20% on Monday morning as investors grappled with the automaker’s apology for cheating on emissions tests and a corresponding halt in diesel sales.
Shares of the German automakerÂ â the world’s largest vehicle manufacturer through the first six months of 2015Â â had fallen to $129.50 as of 7:45 a.m. ET. The stock is listed in Europe.
Investors are absorbing the blow of the automaker’s decision to halt sales of new and used 4-cylinder diesel cars in the U.S. until it can remove software that fooled regulators into believing that 482,000 vehicles were compliant with emissions standards.
Fitch Ratings said Monday that the scandal could put pressure on the automaker’s credit rating, but it noted that Volkswagen’s financial performance remains “extremely robust” globally.
“Nonetheless, the consequences of this crisis for the group’s brand image and reputation with regulators and consumers worldwide is difficult to assess,” Fitch said.
The Environmental Protection Agency and California state regulators on Friday accused Volkswagen of installing a “defeat device” to evade emissions requirements.
The market is also trying to calculate the magnitude of the penalty the company is almost sure to face in the U.S. and other markets.
Diesels represent about 20% of the automaker’s sales in the U.S., according to AutoPacific.
“I personally am deeply sorry that we have broken the trust of our customers and the public,” Martin Winterkorn, Volkswagen’s CEO, said Sunday in a statement. “We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly and completely establish all of the facts of this case.”
Winterkorn pledged to regain the public’s trust and ordered an external investigation.
The diesel cars are emitting nitrogen oxides, which can exacerbate respiratory conditions such as asthma, at up to 40 times the acceptable level.
The EPA has the authority to fine Volkswagen up to $37,500 per vehicle, which could technically add up to a fine of some $18 billion, though analysts don’t expect the agency to levy a fine of that magnitude.
The automaker could also face accusations of false marketing and consumer lawsuits over its promotion of the vehicles under the “Clean Diesel” moniker, in addition to the likely cost of a large recall.
Fitch said class-action lawsuits could lead to additional costs for Volkswagen over the next two years.
The cars affected by the situation are the 4-cylinder diesel versions of theÂ 2009-15 Jetta, Beetle, Golf, the 2014-15 Passat and the 2009-15 Audi A3.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.