DOJ, EPA Files Lawsuit Against Volkswagen; Shares Drop By Over 5%


The U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency (EPA) have sued German carmaker Volkswagen AG (FRA:VOW) for the violation of U.S. emissions law.

The lawsuit, filed in in federal court in Detroit, alleges Volkswagen of installing used software on vehicles to cheat on U.S. emissions tests, Los Angeles Times reported January 4.

The automaker was accused of violating federal law by installing the illegal software on 580,000 cars. The complaint alleges that the illegal software was installed in about 500,000 2.0-liter vehicles — including some Jetta, Beetle, Golf and Passat models — and 80,000 3.0-liter vehicles, including various Audi models.

The lawsuit also named Volkswagen’s Audi and Porsche subsidiaries.

By using an illegal software, Volkswagen violated the Clean Air Act, according to the lawsuit, who noted that the company sold vehicles that were designed differently from what the automaker had mentioned in certification applications to the EPA and the California Air Resources Board.

Volkswagen could face more than $18 billion in fines. According to the lawsuit, the company is liable for up to $32,500 or $37,500 per vehicle depending on the time of the violation.

It is still unclear what amount will the government will demand in penalties. Toyota Motor paid the largest fine ever paid by an automaker of $1.2 billion last year in a criminal settlement, the Times reported.

Volkswagen says that it is working with EPA and other government agencies to resolve the issue, and devise a remedy.

The company said that it is working with American Attorney Kenneth Feinberg to create “an independent, fair and swift process for resolving private consumer claims relating to these issues.”

Shares of Volkswagen AG (FRA:VOW) have dropped by 5.78% to €129.52 on Tuesday morning in Frankfurt.