Volkswagen Emission Scandal ; To Pay Taxes for understating CO2 emissions

Volkswagen group has further sunk in the emission scandal last week when the company admitted to have understated Carbon Dioxide emission in as many as 8,00,000 vehicles in Europe. However, no official statement is made regarding the engines affected. But, 1.4 1.6 and 2.0 TDI (Turbocharged Direct Injection) diesel engines and the 1.4 TSI are most likely to be affected. The engineers stated that the former CEO, Martin Winterkorn, announced in the 2012 Geneva Motor Show that VW group wants to cut down CO2 emission levels by 30 percent by 2015, which was very difficult to achieve and hence the emission levels were understated.

2015-VW-Engine

Taxes are levied according to CO2 emissions, in the entire Europe. So, 4 days after the company admitted the fact last week, the present CEO Meuller, in an open letter to the finance ministers of Europe, requested to charge the automaker with additional taxes due to differences found in CO2 emissions rather than the customers. The German automaker will incur a cost of around $2.2 billion for the tax settlement.
VW entered this scandal in September 2015, when EPA in the United States declared that Nitrogen Oxide emission level in Volkswagen cars during on-road tests is far more than the emission level in laboratory due to defeat devices fitted in the vehicles. These devices reduced the NOx emission levels when itsensed a test but when on road the vehicles emitted about 40% above the limit for better fuel economy and performance. The German automaker has announced that it will recall the affected cars in US to fix the issue. A fine of $18 billion was levied.

Indian unit of VW group also received a Show Cause Notice from ARAI for increased NOx emission level. The company is to respond with explanation on the matter by the end this month. If the presence of defeat device is found in the Indian models, a criminal case will be filled against the group.

This emission scandal has resulted in a 30% reduction of the company’s market value.

 

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