Volvo AB slumped after uncovering a faulty component in the emission-controls setup of trucks sold in the manufacturer’s major markets.
The world’s second-biggest truckmaker has started informing authorities about the issue that’s the result of materials degrading over time and could cause vehicles to exceed emissions limits, the Gothenburg, Sweden-based company said Tuesday in a statement. The cost to remedy the problem “could be material.”
Volvo slid 9.3 percent, the most intraday since June 2016, to wipe 19.5 billion krona ($2.2 billion) off the company’s market value. The stock was 6.5 percent lower at 133.20 krona as of 9:10 a.m. in local trading.
The largest volume of potentially affected vehicles were sold in North America and Europe, Volvo’s two largest markets, which combined represented about two-thirds of its deliveries last year. Volvo is still assessing the extent of the problem, Volvo spokesman Claes Eliasson said by phone.
Emissions Limits
The company said it uncovered the fault, which potentially releases excessive levels of harmful nitrogen oxide, through its own monitoring system. Truckmakers have so far escaped the kind of scrutiny that has hit carmakers following Volkswagen AG’s cheating on diesel emissions, where the company circumvented regulation on nitrogen oxide.
Volvo, whose biggest shareholder Chinese billionaire Li Shufu, said it’s not yet able to estimate the volume of engines or vehicles that may need to be fixed. Li, chairman of Zhejiang Geely Holding Group Co., also owns the separate Volvo Cars brand.
