VW May Face Fines, According to European Commission

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PRAGUE, CZECH REPUBLIC - OCTOBER 1: Volkswagen car maker logo on a building of dealership on October 1, 2015 in Prague, Czech republic.

Volkswagen AG (ETR: VOW3) may face fines for understating the carbon dioxide emissions of its cars, according to the European Commission.

The German carmaker announced on Tuesday that it had also understated the carbon outside emission levels of up to an additional 800,000 cars. Some of these vehicles were powered by gasoline, VW said. Previously, the emissions scandal appeared to only affect diesel vehicles.

VW shares dropped over 8% in early morning trading on the news.

Alexander Dobrindt, German Transport Minister, also announced on Wednesday that all Volkswagen cars, whether gasoline-powered or diesel-powered, will also be tested for carbon dioxide and nitrogen oxide emissions, and fuel consumption.

Mr. Dobrindt expects the understated carbon dioxide emissions will lead to higher vehicle taxes for car owners, and that Volkswagen will be required to take on these extra costs.

Volkswagen has yet to give the commission any details about the new irregularities, so it is still unclear what caused these irregularities, what measures are being taken to remedy them, and which vehicles are affected.

The company disclosed its latest error after conducting emissions tests on its own vehicles.

Volkswagen is sure to face penalties, but it’s still uncertain how large those penalties will be. Depending on how high the carbon dioxide emissions were above the permitted limit, the penalties could be astronomical.

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