Chris Bryant is a Bloomberg Gadfly columnist covering industrial companies. He previously worked for the Financial Times.

(Corrected )

Just as Volkswagen investors had begun to think they could put a price on the diesel scandal, the Justice Department is clouding the picture.

In a civil complaint filed on Monday, the Justice Department accused VW of four violations of the Clean Air Act by installing defeat devices in about 580,000 diesel vehicles sold in the U.S. Theoretically, that could leave VW with penalties of as much as $46 billion, according to Bloomberg Intelligence analyst Kevin Tynan -- more than double the maximum some legal experts had estimated. By comparison, VW's market value is 63 billion euros ($67 billion).

While it's almost certain the final figure won't reach anywhere near that amount, it's a reminder that the emissions cheating scandal is a long way from running its course, and it's too soon to put a value on the penalties VW faces. The stock is a punt for those who believe they can anticipate the size of the penalty U.S. authorities will seek to extract. 

Having rallied as much as 48 per cent since its September low -- largely due to better news about the cost of recalling cars in Europe and better than anticipated sales -- the stock fell as much as 6.4 percent in Frankfurt trading on Tuesday. That drop erased only about $4 billion of market value, indicating investors think the worst outcome is unlikely. 

Diesel Cloud
VW shares have tumbled in the wake of the emissions scandal
Source: Bloomberg data

Bank of America Merrill Lynch analysts estimate claims from the DoJ and Environmental Protection Agency will total $9 billion, bringing total emissions-related charges to 17 billion euros. UBS expects 20 billion euros from the EPA and DoJ and additional 6.3 billion euros in costs tied to class action lawsuits.

Those would still dwarf the highest fine levied in the history of the Clean Air Act, the $100 million that Hyundai and Kia agreed to pay in 2014 to settle claims it overstated fuel economy. They're also bigger than the 6.7 billion euros VW has so far set aside for recall costs.

The most troubling piece of news from the DoJ's announcement on Monday is that VW still hasn't been able to satisfy U.S. regulators with a recall plan for affected vehicles.

VW squandered goodwill by concealing the cheating for several years and then failing to confess properly when given the chance. The last thing it needs is to antagonize the EPA further by not swiftly providing a satisfactory plan. That will only make it harder for investors to estimate the cost of the scandal.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(Corrects estimate of maximum penalties in second paragraph.)

To contact the author of this story:
Chris Bryant in Frankfurt at

To contact the editor responsible for this story:
Edward Evans at