Volkswagen sets aside $18.2 billion for diesel scandal

Volkswagen sets aside $18.2 billion for diesel scandal
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Volkswagen Group has doubled its estimate of how much the fallout from its diesel emissions scandal will cost, setting aside $18.2 billion for the task.

The estimate came in a Friday statement updating investors on Volkswagen’s earnings. The company also said it lost $4.58 billion last year, due largely to the diesel scandal.

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“The current crisis — as the figures presented today also reveal — is having a huge impact on Volkswagen’s financial position,” Volkswagen chief Matthias Mueller said in the statement, adding that the “repercussions of the emissions issue are now quantifiable.”

The German company admitted last year that about 11 million diesel-powered vehicles it sold around the world had software intended to cheat on emissions tests, showing lower emissions than the vehicles’ actual performance to meet pollution laws.

The huge costs to Volkswagen come from current and future payments to customers, fines to governments, car repairs and replacements and other related expenses.

The company predicted that its vehicle sales would be flat in 2016 compared to 2015, and that sales revenue could fall by 5 percent.

The earnings information came a day after Volkswagen agreed in principle to repair or buy back about 500,000 of the affected vehicles that were sold in the United States.