Volkswagen shares are diving again on Tuesday morning. They’re off almost 4% after losing more than 20% in trading on Monday.
Investors are seriously concerned about the company after US regulators found that software the carmaker designed for diesel cars gave false emissions data. VW faces fines of up to $US18 billion (£11.6 billion), the Environmental Protection Agency said on Friday.
The scandal goes to the heart of the carmaker’s business. In a research note Monday, Evercore auto analyst Arndt Ellinghorst called the violation a “move more worthy of a back-street garage looking to get a used car through a mandated vehicle inspection.”
The company fitted its US diesel cars with software that activates the pollution controls only when the car is undergoing official emissions testing.
The cars with the software — called a “defeat device” — would pollute at 10 to 40 times the legal limits when driven normally, the EPA estimated.
Meanwhile, European markets are mixed. The FTSE 100 is down 0.24%, the Euro Stoxx 50 is off 0.19%, while Germany’s DAX index is up 0.04%.
Shares in RSA Insurance are recovering slightly from a 20% plunge on Monday on news that Zurich Insurance walked away from its £5.5 billion ($US8.5 billion) bid for the company.
Here’s what that looks like:
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