VW to invest €2 billion in 2019 after emissions scandal

VW to invest €2 billion in 2019 after emissions scandal

The diesel emissions scandal costed Volkswagen €5.5 billion ($6.2 billion) this year and will cost €2 billion in 2019, as Chairman Frank Witter told German weekly journal Boersen-Zeitung.

Due to the excessive levels carbon dioxide in their diesel cars’ emissions, the German automaker has paid over €27 billion since 2015 to settle lawsuits filed by investors and consumers. This amount also includes fines and other expenses related to this matter.

Back then, U.S. authorities revealed that VW had manipulated the emissions tests with a deactivation device installed in no less than 11 million VW diesel models around the world.

The software, which the Environmental Protection Agency (EPA) named the “defeat device”, deliberately avoided certain emissions standards for four-cylinder diesel TDI models.

According to the agency, the device helps the engine perform in a certain way when being tested and another way when driving under normal everyday conditions. The result is that the model’s oxide nitrous emissions stand at 40 times over the limit allowed.

Therefore, Volkswagen Group will spend around €1 billion in expenses related to its emissions fraud scandal in 2020.

Frank Witter told the journal that VW continues to see potential for growth in China, the world’s biggest automobile market.

Electric vehicles

The German automakers big move for the coming years is to become the world’s most profitable electric car manufacturer. In this sense, it will execute a million-euro expansion plan to produce a series of EVs.

Estimations indicate that VW will spend nearly €44 billion ($50 billion) in electric car development, autonomous driving, and new mobility services by 2023.

The MEB Entry will be its flagship model. This alternative vehicle is meant to be direct competition for the sector’s leader, Tesla, thanks to its lower price tag of €20,000.

The high costs of electric vehicles has been one of the main obstacles in the process to penetrate the market.

MEB Entry production lines will include converting three factories in Emben, Zwickau, and Hannover. These facilities will be repurposed for electric vehicle assembly.

The first launch is set to include around 200,000 units of the MEB Entry. On the other hand, a medium sedan called the I.D. Aero will also be out on the market with another 100,000 units.

Regulators are putting enormous pressure on automakers to take actions against climate change. Herbert Diess, the firm’s CEO, indicated that it remains uncertain whether there is a method to generate enough energy to feed such a large EV fleet.

The European Union agreed a week ago to reduce vehicle’s carbon dioxide emissions by 37.5 percent by 2030.

For more information, visit Energía16

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