Volkswagen Cheating Scandal Could Cost $60 Billion in the US Alone

The U.S. Department of Justice on Monday filed a civil suit in federal district court seeking more than $60 billion in damages from Volkswagen for the vehicles it sold in the United States that were equipped with a device to defeat emissions testing in its diesel-powered vehicles. The suit names Volkswagen, its U.S. subsidiaries and the company’s German and U.S. Porsche divisions for violations of the U.S. Clean Air Act.

The Justice Department is seeking injunctive relief and civil penalties on four separate claims. First that VW and its subsidiaries sold or offered for sale approximately 500,000 2.0-liter vehicles and 80,000 3.0-liter vehicles that were not covered by certificates of conformity (COCs) that carmakers are required to obtain from the U.S. Environmental Protection Agency (EPA) for each model year and test group of vehicles a company intends to sell in the United States. The COC must specify all emissions control devices on the vehicle, and no defeat devices are allowed on certified vehicles.

The Justice Department is seeking a fine of $32,500 per vehicle prior to January 13, 2009, and $37,500 for each vehicle after that date. The filing does not indicate how many vehicles fall into either category, but according to an EPA press release, about 499,000 of the 2.0-liter vehicles and 85,000 3.0-liter were sold after the specified date. In that case, the total fine would come to around $20.6 billion on the first claim.

The second claim for relief seeks civil penalties for installing the defeat device in the 580,000 vehicles. In this claim the government seeks $2,750 per component for defeat devices installed in the 2.0-liter vehicles and $3,750 for 3.0-liter cars. That total runs to $1.675 billion.
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A third claim, for tampering, seeks similar penalties as those for falsifying the COC, and the fourth claim seeks the same penalties for failing to report the violations. So the total could run to around $60 billion, depending on the actual number of each type of vehicle.

The full filing is available here.