Ducati parent Volkswagen’s share price plummeted by more than 20% this morning (21 September), after chief executive Martin Winterkorn apologised unreservedly to US environmental regulators for cheating on air pollution tests for its diesel-powered cars over many years. The fall wiped out nearly one-quarter of VW’s market value, equivalent to about £11.2bn.
It has also been instructed by the US Environmental Protection Agency to recall half a million VW and Audi cars to remove “defeat” engine management software that detected when a vehicle was being tested for emissions and temporarily reduced nitrous dioxide emissions to a compliant level. In normal traffic use, the same vehicle would emit up to 40 times as much of the pollutant.
If the EPA imposes maximum fines per vehicle affected for this blatant regulatory infringement, VW will face a bill approaching £12bn. The £2.45bn in cash the group has just received for its Suzuki shareholding will put a modest dent in that. A rumoured disposal of Ducati, should it take place, would help with approximately another £1bn.