how much?

Ballpark Estimate:  $35 Billion

“Resale values on Volkswagen AG‘s diesel cars in the U.S. have taken a tough hit in the weeks since auto maker’s emissions scandal emerged, falling an average of 13%, or about $1,700 per vehicle since mid-September as car dealers stay away from the tainted vehicles, according used-car pricing guide Kelley Blue Book.”

“Kelley Blue Book:  Volkswagen Diesel Car Values Decline 13%”; Wall Street Journal (10/6/2015)

I’ll leave the number-crunching to the CPA’s, but investors trying to estimate VW’s potential liability have these figures to work with:

A. Number of VW diesel cars reportedly affected worldwide:  11 million
B. Drop in value per car:  $1,700
C. “A.” x “B.” = $18.7 billion
D.  Add:  30% for legal fees (plaintiff’s attorneys in class action; legal defense, etc.) = $9.35 billion

Grand total:  $28 billion


Of course, that’s just for what are called “compensatory” or “economic” damages.

Add 25% in punitive damages, government fines, etc. and the total (legal) price tag could easily trip $35 billion.

P.S.:  A lot of money, to be sure, but nothing Apple couldn’t pay out of petty cash.

See also, “Four Reasons Why Apple Should Buy VW.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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