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Business

Volkswagen to Take $18.2 Billion Hit on Emissions Scandal

The company had delayed its earnings announcement until it could get a better estimate of the costs involved

A Volkswagen logo is pictured at Volkswagen's headquarters in Wolfsburg, Germany, April 22, 2016, photo: Reuters/Hannibal Hanschke
2 years ago

German carmaker Volkswagen said Friday that it is to take a 16.2 billion-euro ($18.2 billion) hit in its 2015 accounts related to a diesel-emissions scandal identified in the U.S. last year.

The announcement came ahead of a news conference at its Wolfsburg headquarters that follows the outlines of a deal with U.S. environmental authorities.

Under the terms of the proposed deal, Volkswagen would offer to buy back almost 500,000 cars equipped with software that let the cars to cheat on emissions tests.

Attorney and former FBI Director Robert Mueller, right, arrives for a court hearing at the Phillip Burton Federal Building in San Francisco, Thursday, April 21, 2016. Mueller has been overseeing settlement talks with Volkswagen, the U.S. government and private lawyers for the automaker to buy back some of the nearly 600,000 diesel cars that cheat on emissions tests. (AP Photo/Jeff Chiu)

Attorney and former FBI Director Robert Mueller, right, arrives for a court hearing at the Phillip Burton Federal Building in San Francisco, Thursday, April 21, 2016. Photo: AP/Jeff Chiu

The company had delayed its earnings announcement until it could get a better estimate of the costs involved. Analysts say the total costs in fines, legal judgments and lost sales will be significantly higher.

Volkswagen also said it will not be able to release results of an internal probe of its emissions scandal this month as expected. The company now says the probe conducted by U.S. law firm Jones Day could be completed by year end.

The company said early release of partial results would interfere with settlement negotiations in the U.S. and could interfere with cooperation with U.S. law enforcement.

However, it said will post an after-tax loss of 1.36 billion euros for 2015 and a net loss of 5.5 billion euros.

Joyce Ertel Hulbert, owner of a 2015 Volkswagen Golf TDI, holds a sign while interviewed outside of the Phillip Burton Federal Building in San Francisco, Thursday, April 21, 2016. An agreement will give consumers who bought nearly 600,000 Volkswagen vehicles rigged to cheat on emissions tests the option of having the automaker buy back the cars or fix them, a judge said Thursday. (AP Photo/Jeff Chiu)

Joyce Ertel Hulbert, owner of a 2015 Volkswagen Golf TDI, holds a sign while interviewed outside of the Phillip Burton Federal Building in San Francisco, Thursday, April 21, 2016. Photo: AP/Jeff Chiu

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