Volkswagen hit hard by fallout from emissions cheating scandal as investors dump stock and credit agency downgrades debt
Plunge driven by the revelation that the emissions scandal, previously confined to the company’s diesel-engined cars, also involved some of its gasoline or petrol engines as well.
Embattled Volkswagen’s credit rating was cut by Moody’s on Wednesday as the toll on the German automaker grew over its cheating on emissions.
Moody’s cut the rating by one notch to A3 after the newest allegations that Volkswagen included illegal defeat devices to hide poisonous nitrogen oxide pollution on its luxury diesel cars including Porsches.
In addition, Moody’s cited the company’s acknowledgement on Tuesday that it had under-reported CO2 emissions levels in another 800,000 vehicles, including, for the first time in the burgeoning scandal, cars with gasoline engines.
While Moody’s said Volkswagen had the financial strength to survive what could cost the company many billions of dollars in fines and compensation, it said the company’s reputation and earnings were at risk.
After the US Environmental Protection Agency accused the company of also including the defeat devices on its 3.0 liter diesel engines – used by larger, more expensive VW and Audi models and the Porsche Cayenne SUV – the company halted sales of those models in the US.
Read more: US Volkswagen CEO apologises for emissions scandal but says it’s not his fault
Moody’s noted that those premium cars “are top contributors to Volkswagen’s profitability”.