Washington - Volkswagen is struggling to agree with US authorities a fix for vehicles capable of cheating emissions tests, a VW source said on Tuesday, showing how relations between the two sides remain strained four months after the cheating came to light.
The source said the German carmaker would hold further talks with the Californian Air Resources Board this week and with the US Environmental Protection Authority (EPA) next week, and still hoped to reach a solution by a mid-January deadline.
But finding a fix was proving more difficult than expected, in part because this involved producing new components which then required testing, said the person, who declined to be named as the talks are confidential.
The difficulties highlight the lack of progress VW has made in winning back the confidence of US regulators and drivers almost four months after it admitted to cheating diesel emissions tests and promised to turn over a new leaf.
The US Justice Department is suing Europe's biggest carmaker for up to $48 billion (R760bn) for allegedly violating environmental law - a reminder of the carmaker's problems nearly four months after its emissions scandal broke.
The move threw VW's US problems back into focus after it seemed to be recovering ground in Europe, sending its shares down more than 8 percent to a six-week low on Tuesday.
REALITY CHECK
“The announcement serves as a reminder/reality check of VW's still unresolved emissions issues,” Goldman Sachs analysts said of the lawsuit.
VW Chief Executive Matthias Mueller is expected to meet EPA representatives and politicians in Washington next week after visiting the Detroit Auto Show, the VW source said, on what will be Mueller's first trip to the United States since the scandal broke in September.
VW declined to comment on the progress of talks with the EPA, on whose behalf the US Justice Department filed the lawsuit, or on Mueller's plans.
MAX PENALTY UNLIKELY
According to a Reuters review of the US complaint, VW could in theory face fines of as much as $37 500 per vehicle for each of two violations of the law; up to $3750 per “defeat device”; and another $37 500 for each day of violation.
The complaint says illegal devices to impair emission control systems were installed in nearly 600 000 vehicles in the United States.
However, US lawsuits are typically settled at a fraction of the theoretical maximum. Goldman has estimated the likely costs at $534 million (R8.47bn).
A senior US Justice Department official said the judge was not expected to rule that every car should be charged for all four counts, but said the department had set the bar high, knowing it would come down.
Another senior departmental official said a settlement would likely be “in the billions”, without elaborating. Both officials declined to be named.
Reuters