Volkswagen announced Tuesday it will set aside $7.3 billion in order to cover fines and expenses related to its admission that it fitted certain diesel vehicles with a defeat device designed to skirt US emissions laws, Autoblog reports.
The automaker said last week that passenger cars powered by its 2.0-liter diesel TDI engine were fitted with a device that would alter the engine’s operation while it underwent emissions testing. This allowed the cars to pass strict US emissions lab tests and then revert to a different, less earth friendly setting once out on the road.
VW stock slid 17 percent on Monday and then tumbled another 16.2 percent Tuesday. Stock prices aren’t the only place the automaker has taken a hit as a result of ‘Dieselgate, with the automaker’s reputation in North America and in its home market of Europe now also in jeopardy.
The US Environmental Protection Agency could fine VW a max of up to $18 billion, though its highly unlikely VW will face the maximum penalty. The automaker said it set aside the $7.3 billion to cover the recalls and servicing on the cars, for the potential fines it may face and “other efforts to win back the trust,” of its customers.