Volkswagen AG shares plummeted by 22% after the company admitted to cheating on U.S. air pollution tests for years.
The company is now facing potentially billions of dollars in fines, a fact that isn’t sitting well with investors. Shares at the automobile maker plunged as much as 22 percent to 126.40 euros, the steepest intraday decline since Oct. 24, 2008. The company’s stock is down 32 percent on the year.
The massive 22% drop in share prices wiped out approximately 16 billion euros ($18 billion) in value, giving the Germany-based company a new net value of 60.4 billion euros.
On Sunday Volkswagen Chief Executive Officer Martin Winterkorn said the company is cooperating with the probe and ordered its own external investigation into the issue. The CEO said he was “deeply sorry” for breaking the public’s trust and that VW would do “everything necessary in order to reverse the damage this has caused.”
VW’s board is set to vote on Winterkorn’s contract renewal on Friday, a vote that may not go in his favor.
In the meantime, Volkswagen has suspended sales of all models involved in the scam. The violations already total more than half a million vehicles and could total more than $18 billion in fines. Some analysts have even predicted that criminal prosecution could become a reality.
The company recently admitted that it built software that turns on full pollution controls only when the car is undergoing official emissions testing. The ‘defeat device’ allowed VW vehicles to pollute at 10 to 40 times the normal legal limits when not undergoing emissions testing.
The company marketed its diesel vehicles as a clean alternative to other diesels. A large chunk of the company’s growth was based around that promise.
Sales of VW-brand cars in the US dropped 10 percent last year to 366,970.