VW pleads guilty in U.S. over dieselgate; what's next?

March 14, 2017

Since Volkswagen is deep in the midst of buying back from consumers hundreds of thousands of diesel-fueled cars with non-compliant emissions software, you might think that the German automaker has already apologized and moved on.

That's not quite the case, as it turns out. Last week, VW pled guilty to three felony charges amounting to $4.3 billion in fines—conspiring to defraud the U.S., obstructing justice, and importing goods by means of false statements—in a Detroit district court. The pleading was largely a formality, the culmination of about 18 months of investigation. Sentencing has been deferred to April 21. 

It's the beginning of the end in the U.S. for a scandal approaching $25 billion in payouts, buybacks, and fines that has rocked the automaker when it was announced in late 2015—but that doesn't mean that VW is out of the hole just yet.

As the world's largest automaker, VW's home market of Europe is its next hurdle. The automaker has not said if it will buy back cars equipped with similar emissions devices in Europe. Iinstead, VW is recalling affected vehicles and modifying them. 

MORE: Study suggests VW may be responsible for "1,200 premature deaths" in Europe

The fundamental difference? The defeat software was labeled as a cheat in the U.S., which meant that not only was it illegal, the automaker repeatedly lied to American authorities. Things are a little hazier in Europe. Because emissions standards on diesels in the U.S. are far more strict than they are in Europe, VW contends that software programming labeled as illegal in the U.S. is acceptable in Europe. The cars were programmed to perform better than they should in the U.S., but those delivered elsewhere didn't require the illegal programming in the first place. 

The European Commission gathered consumer protection agencies from 22 of its members last week to discuss the matter. While no formal announcement has been made, they have agreed to work together to go after VW. 

The automaker could face billions in fines, customer payouts, and even vehicle buybacks, depending on how the Commission chooses to act.

Clearly, there are still a few chapters left in this story.

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