Volkswagen AG (OTCMKTS:VLKAY) has submitted a proposal to the California Air Resources Board (CARB), detailing a plan for recalling and fixing its diesel-emitting vehicles.
The manufacturer of the iconic Beetle was given a deadline to submit a repair plan for its 80,000 Sports Utility Vehicles (SUVs) and larger cars, which were found to emit pollution in excess of the levels permitted by the United States’ Environmental Protection Agency (EPA). The vehicles include 3.0 liter Volkswagen Touareg models from the years 2009-2016, the 2013-2016 Porsche Cayenne as well as the 2014-2016 Audi A6 Quattro, Audi A7 Quattro, Audi A8, Audi Q5, Audi A8L, and Audi Q7.
CARB confirmed in an emailed statement that it has received the plan from Volkswagen, but no further details were shared. EPA, which is carrying out a parallel investigation regarding a breach of federal clean air rules by the company, also confirmed the submission of the plan.
Volkswagen witnessed widespread criticism when it confessed to having installed illegal software which misrepresented the vehicle emissions. These vehicles were said to have emitted up to 40 times more greenhouse gases than EPA standards. Last week, the automaker received approval to begin fixing 8.5 million vehicles in the European region. According to the company, the diesel gate emission scandal went on to cover approximately 11 million vehicles across the world.
Recently, there have been reports that the company may have to dispose off its trucks unit in order to raise money to make up for hefty sums lost in fines and penalties, after having acknowledged the misconduct. These claims were brushed aside by a company board member, who also heads Volkswagen’s trucks business unit. Reuters reported on Sunday that Andreas Renschler said in an interview to a German newspaper, Frankfurter Allgemeine Sonntagszeitung, that the automaker is not under any pressure to sell its trucks business.
Volkswagen stock has tanked 30% ever since the diesel emission scandal surfaced in September. The company was penalized with a hefty amount, and saw a drastic drop in sales after that. Its financial position may take a further blow in the wake of huge penalties, a drastic slide in sales, as well as costs incurred in repairing of recalled vehicles.
The company took another hit last month when CARB disapproved its proposal to repair vehicles that failed to meet emission standards. The German company had earlier put forward a proposal to fix 76,000 of its 2.0 liter engine cars, through the use of a catalytic convertor. This, according to the company, would pull down the emission levels to EPA standards. The convertor was designed to break down harmful nitrogen-oxide into hydrogen and water, making the cars environmental-friendly.
Volkswagen stock closed at $25.59 yesterday, down about 2.35%. Year-to-date, the stock has shed 17.38% of its value, underperforming the S&P 500 Index, which has lost around 7% over the same time period.