Germany demands VW clarification after new CO2 emissions admission

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The German government has called for a thorough explanation from Volkswagen a day after the carmaker admitted that its emissions-cheating scheme extended to petrol-run engines and carbon dioxide (CO2) outputs.

“It has to be expected that pledges made to consumers are also adhered to,” government spokesman Steffen Seibert said at a press conference in Berlin on Wednesday.

VW saw its shares plummet by more than 10 per cent earlier in the day as investors reacted to the news that CO2 emissions irregularities affect 800,000 Volkswagen cars, representing an economic risk to Europe’s biggest carmaker of about 2 billion euros (2.2 billion dollars).

Transportation Minister Alexander Dobrindt said Tuesday’s admission concerns 98,000 petrol-fuelled vehicles among mostly diesel models.

VW’s Polo, Golf and Passat are implicated, as well as Audi’s A1 and A3 models, Skoda’s Octavia, Seat’s Leon and Ibiza.

The news dragged the preferential share price to below 100 euros (109 dollars). Shares in VW were worth more than 250 euros just half a year ago.

Shares in two other German carmakers, BMW and Daimler, were also weighed down by the news, as well as those of auto parts maker Continental, all of which had recently reported strong quarterly earnings.

The drop in VW’s value took the entire Dax index down by 0.20 per cent, to 10,929.59 points, a psychological blow after the index had recently climbed up to more than 11,000.

US lawmakers investigating the scandal on the House Energy and Commerce Committee also wrote a letter to Volkswagen’s US chief Michael Horn on Tuesday, requesting additional information by November 16 on so-called defeat devices in VW vehicles designed to skirt emissions controls.

The scandal, which broke in September, had already affected 11 million cars with diesel engines that were installed with software that allowed cars to falsely report lower emissions of nitrogen oxide in an effort to sidestep environmental regulations.

Meanwhile, Porsche announced that it would stop US sales of its Cayenne sport utility vehicle, one of the diesel models named by the country’s Environmental Protection Agency on Monday in new suspected violations of exhaust standards.

A spokesman said Wednesday the decision to scrap the delivery of the model was a precautionary measure and that EPA allegations were being reviewed.

The European Union could penalize Volkswagen if the company has exceeded the bloc’s CO2 limits for car manufacturers, a spokeswoman for the European Commission said Wednesday.

“We need to clarify without delay what kind of CO2 emission irregularities were found, what has caused them, which cars are affected, where they were registered and what measures the group will undertake to remedy the situation,” Lucia Caudet said.

Under EU rules, car manufacturers must not exceed average CO2 emissions ceilings set for their entire fleet of vehicles. These limits are determined for each carmaker individually and become more stringent each year.

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