VW Stocks Jump After Recall Rejection

VW stocks popped about 2% last Thursday after the proposed recall plan was rejected by the California regulators. This decision comes right after the company asserted to use “clean diesel,” yet instead used Auxiliary Emission Control Devices (AECDs) in order to pass emissions tests. VW announced last June that it had already reached a $15 settlement agreement with regards to the scandal. CARB or the California Air Resources Board said that Volkswagen’s plan didn’t demonstrate how their proposed fixes were catered to correct the nonconformities. Which is why, the state plans to work with EPA and VW in order to find a sustainable resolution. CARB also indicated that the company would not disclose the types of AECDs that will be used during testing. "VW's and Audi's submissions are incomplete, substantially deficient and fall far short of meeting the legal requirements to return these vehicles to the claim certified configuration," CARB said in its rejection letter to Volkwagen. California is one of the states that VW has agreed to resolve on their existing and potential state consumer claims with regards to the diesel matter. There are even 43 more states that are included. "We continue to work closely with the U.S. Environmental Protection Agency and CARB to try to secure approval of a technical resolution for our 3.0L TDI vehicles as quickly as possible," a Volkswagen spokesman said. With regards to their stock options, VW’s shares have dropped more than 41% in the past year. With this rejection, VW must be able to up their game in order to meet standards required by the California Air Resources Board and also the Environmental Protection Agency. With the diesel scandal dragging by the days, it is very important that they get to be able to resolve this one as soon as they can. Although they have been shelving money for settlement purposes, seems like their efforts are still not enough. Yet there is that keen sense of resolving the diesel scandal on the side of VW.
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