The US government has sued Volkswagen over allegations that the German company illegally installed special software to cheat emission tests.



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The lawsuit filed by the Department of Justice in federal court in Detroit on Monday claims that VW violated the Clean Air Act by installing “defeat devices” in almost 600,000 diesel vehicles in the US.

After being caught by the regulator in September, VW admitted installing the software, which was designed to trick regulators into believing its cars are less polluting than they really are by producing low emissions only when undergoing official tests, in more than 11m vehicles across the world.

The allegations in the lawsuit, brought on behalf of the Environmental Protection Agency (EPA) carry penalties that could cost Volkswagen more than $30,000 per vehicle, which could total as much as $18bn.

The emissions scandal has already wiped tens of billions of euros off VW’s share price, and analysts have warned that the total cost of the scandal could be as high as €78bn ($84.4bn, £57.4bn), which would be 60% more than the Deepwater Horizon disaster cost BP. VW has so far set aside €6.7bn to cover the cost of the scandal.

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John Cruden, assistant attorney general and head of the justice department’s environment and natural resources division, said: “Car manufacturers that fail to properly certify their cars and that defeat emission control systems breach the public trust, endanger public health, and disadvantage competitors.”

Cynthia Giles, assistant administrator for the EPA’s office of enforcement and compliance assurance, said: “With today’s filing, we take an important step to protect public health by seeking to hold Volkswagen accountable for any unlawful air pollution, setting us on a path to resolution.

“So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action.”

The civil lawsuit, which is being filed in the eastern district of Michigan before being transferred to California where class action lawsuits against the company are pending, does not preclude prosecutors from bringing criminal charges against VW executives, a justice department official said.

“We’re alleging that they knew what they were doing, they intentionally violated the law and that the consequences were significant to health,” the justice department official told Reuters.

Barbara McQuade, US attorney for the eastern district of Michigan, said: “Today’s complaint is the first stage in bringing Volkswagen to justice for failing to disclose the defeat device while seeking certification for its diesel vehicles from EPA’s Office of Transportation and Air Quality in Ann Arbor.

“The alleged misrepresentations allowed almost 600,000 diesel engines to emit excessive air pollution across the country, harming our health and cheating consumers.”

“I think EPA is saying that VW has not found a solution to the problem and this suit is meant to send a message that it needs to take this issue as seriously as the US government does,” said Carl Tobias, Williams chair in law at the University of Richmond.

“VW will face criminal charges, but the investigation is still ongoing and will build on the expertise derived from similar probes of GM and Toyota. Toyota took three or four years but GM was faster and VW may be quicker still. Depending on what the justice department finds, it may demand more money and also pursue criminal charges against VW staff,” he said.



VW did not immediately respond to requests for comment about the lawsuit.

The company has repeatedly apologised for the scandal, and several senior executives have resigned. Former CEO Martin Winterkorn quit after saying he was shocked and stunned that “misconduct on such a scale was possible” and the company was in the midst of a “grave crisis”.

Michael Horn, the boss of VW in the US, apologised to lawmakers in Washington in October and said the company was “determined to make things right”.

“Our company was dishonest, with the EPA and the California Air Resources Board, and with all of you and in my German words, we have totally screwed up,” he told the House committee on energy and commerce. “We have to streamline our processes, and this company has to bloody learn and use this opportunity in order to get their act together.”

Regulators in other countries, including India, South Korea and Germany, are also carrying out investigations into the VW scandal.