£100 BILLION bill if VW forced to buy back defeat device cars

One outcome of the VW defeat device scandal is that VW could be compelled by legislators to buy back the affected cars. Which could cost £100 billion.

The VW board are meeting today and are expected to announce more heads will roll over the defeat device scandal that has seen at least 11 million cars fitted with software to scam emissions tests, as well as who will be given the (probably) poisoned chalice of steering VW through the crisis (the money is on Porsche’s Matthias Muller).

VW has set aside around £5 billion to deal with the fallout from their scam, but that seems a a paltry amount of money to cover the illegal sale of at least 11 million cars around the world.

What would happen if VW are forced to buy back the affected cars and scrap them?

The VW Buyback option is an extreme one – much more likely is VW being forced to fix the emissions on the affected cars and compensate owners for the inevitable reduced performance and loss of resale value – but it’s a scenario that must be weighing heavily on VW’s board.

There’s no real way of knowing just how much this will end up costing VW, but if we assume the deception is limited to just the 11 million cars VW has already admitted to (and there could be more), and we give each car a modest value of £9k, then VW would be faced with a bill of around £100 billion.

If that happens, VW would almost certainly have to either turn up its toes or look to the German Government for a bail out. Which isn’t going to thrill Angela Merkel.