- VW says diesel emissions fix progress makes trial unneeded
- Carmaker tells judge a hearing on Thursday will back it up
Volkswagen AG rose to a six-week high after the manufacturer said it expects no need for a U.S. trial in mid-2016 over damages related to rigging diesel-engine control software to dupe emission tests.
VW jumped as much as 5.4 percent to 119.50 euros, the highest intraday price since March 7, and was trading up 5 percent as of 11:07 a.m. in Frankfurt. That pared the stock’s decline since the scandal became public in September to 27 percent.
The carmaker does “not believe” a trial will be necessary after it updates a judge Thursday on its proposed solution for dealing with the 600,000 diesel vehicles affected, Volkswagen said late Tuesday in an agenda for the hearing.
“This supports our view that VW will likely ‘draw a line’ under the U.S. situation,” Arndt Ellinghorst, a London-based analyst at Evercore ISI, said in a report to clients. “It would be a major positive trigger for the stock if VW quantified the total potential cost of the diesel affair.” VW’s provisions could widen to about 15 billion euros ($17 billion), including 6.7 billion euros already booked in the third quarter, and it’s likely to calculate total costs of the scandal at about 30 billion euros, according to Evercore ISI estimates.
U.S. District Judge Charles Breyer in San Francisco, who is overseeing lawsuits against Volkswagen, has indicated that a summer trial might be necessary if the German carmaker can’t arrange a drastic reduction in the polluting vehicles’ emissions or remove the models from the road. The judge set the April 21 deadline for the company to submit a detailed plan. Lawyers for about 600 plaintiffs in the case asked the judge for preparations for a mid-year trial dependent on the status and progress of VW’s proposal.
Investigators are struggling to make headway through data secured from more than 1,500 laptops and other devices that might prevent them from filing a complete report on the Wolfsburg, Germany-based carmaker’s emissions cheating by the end of the month, according to people familiar with the status of the probe.
Volkswagen admitted last year that it had manipulated diesel engines on some 11 million cars worldwide with a “defeat device” so emission controls switched on only during pollution tests. A plan to fix the 8.5 million non-compliant autos in Europe was largely approved in December but failed to meet California’s emissions standards for cars with diesel engines.
U.S. regulators have expressed doubt as to whether the cars can be fixed at all. A California regulator in March told state legislators it was unclear whether a solution aside from scrapping the vehicles was possible.
Jeannine Ginivan, a U.S. spokeswoman for VW, declined to comment on the talks, as did Julia Valentine, a spokeswoman for the U.S. Environmental Protection Agency.
The case is In Re: Volkswagen “Clean Diesel” Marketing, Sales Practices and Products Liability Litigation, MDL 2672, U.S. District Court, Northern District of California (San Francisco).