Volkswagen vows to fix diesels, launch new electric vehicles

ASSOCIATED PRESS
FRANKFURT
Published 29.04.2016 00:12
Updated 29.04.2016 00:13
Volkswagen vows to fix diesels, launch new electric vehicles

Volkswagen's CEO says the company will launch new electric vehicles and set up a new firm focused on operations like car-sharing as it seeks to get past its scandal over cheating on diesel emissions tests. Matthias Mueller said yesterday that recalling and fixing those cars "will remain our most important task until the very last vehicle has been put in order."

He said the company would soon form a legally independent company to promote business in mobility services, which can include things like ride-sharing apps and car-sharing. He also said the company would "make electric cars one of Volkswagen's new hallmarks" with 20 new models by 2020. He apologized again for the scandal at the company's annual news conference, saying "we disappointed many people who trusted Volkswagen."

He stressed that the company's car business remains "fundamentally sound" but detailed a promised plan to emphasize digital services and zero-emissions vehicles.

Volkswagen had previously emphasized diesel technology, which has suffered a blow since it became clear Volkswagen engines could not meet U.S. emissions standards without cheating. The company has admitted using engine software that disabled emissions controls when vehicles were not being tested. That improved performance and mileage but meant the vehicles spewed far more than the legal limit of pollutants.

The company said last week that it made a net loss of 5.5 billion euros for 2015 after setting aside 16.2 billion euros ($18.3 billion) to cover the costs of the scandal. Analysts say the final cost will be significantly higher.

Of the set-aside for the scandal, 7.8 billion euros ($8.8 billion) was devoted to fixing or buying back diesels with the rigged software. The company is currently working out a settlement with U.S. authorities in federal court in San Francisco, and has said that would include an offer to buy back as many as 500,000 of the just under 600,000 defective vehicles. The company said its robust cash reserves of 24.5 billion euros at year end left it in a strong financial position. Chief Financial Officer Frank Witter said that the company would not propose any capital increase to shareholders at its annual meeting in June.

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