Credit ratings firm Moody’s downgraded Volkswagen’s credit on Wednesday, as fallout from the German automaker’s emissions scandal plagues the auto giant.
The credit downgrade follows new revelations by federal environmental regulators earlier this week that the company’s emissions cheating has grown beyond initial violations that affected nearly a half-million diesel vehicles.
The credit downgrade “reflects mounting risks to Volkswagen’s reputation and future earnings,” Moody’s said, pointing out that the downgrade reflects several new revelations about the extent of the company’s violations.
The White House even chimed in Wednesday.”I do think it is apparent that they’re struggling to get their arms around … what appears to be a pretty significant problem,” spokesman Josh Earnest told reporters at his daily briefing.
On Monday, the Environmental Protection Agency announced new violations of vehicle emission standards, in which purposefully installed software was meant to cheat emissions testing. The announcement, which added Porsche to the models with the “defeat devices,” adds to the number of vehicle models subject to fines.
On Tuesday, VW disclosed irregularities in the carbon dioxide emissions levels of its vehicles. The announcement was the second red flag that forced the Moody’s downgrade.
All vehicles in the U.S. must comply with specific standards for conventional pollutants such as nitrogen oxide as well as greenhouse gas emissions such as carbon dioxide.
