It's sure been a busy couple of weeks for Volkswagen, but not for good reasons. On the 18th, the Environmental Protection Agency (EPA) revealed that Volkswagen had been cheating on its emissions tests, which is an incredibly serious offense. Similar to what we've seen in the past from certain computer hardware companies with gaming benchmarks, VW's software detected when a specific test was being run, and adjusted variables accordingly. This allowed it to pass its emissions tests with flying colors, but in actuality delivered awful results in the real-world.
While then-CEO Martin Winterkorn was quick to apologize for his company's dishonesty, the inevitable happened mere days later: he departed the company, and has since been replaced by Matthias Mueller.
Today, we learn that VW will have to update 11 million vehicles, either through software, hardware, or both. It seems that some vehicles will be able to get off with just a simple update, most of the 482,000 vehicles affected in the US will need hardware upgrades. At the very least, guilty vehicles include 2009 - 2015 range Jettas, Beetles, and Golfs, 2014 - 2015 Passats, and 2009 - 2015 Audi A3s.
It's estimated that the vehicle retrofitting will cost at least $7.3 billion, a rather incredible fee for something that could have been entirely avoided. Worse still, the company could face upwards of $18 billion in fines from the government, although it seems highly unlikely that the final value would be anywhere near that. For comparison's sake, General Motors' ignition switch debacle, one that resulted in over 100 deaths, caused an overall fine of $900 million. No one has died from VW's poor decisions, but the excess emissions do affect both people and environments alike.
One thing's for certain: this mess is going to take quite some time to clean up, and VW is facing an uphill battle to recover. Its stock price currently sits at $97.75, down from $162.40 on the 18th.