Takata estimates it may have to pay $24 billion in costs related to its airbag inflator recalls, according to Bloomberg. Following that report, shares for the company tanked to an all-time low.
Although industry estimates put Takata’s bill at more than $3.5 billion, Takata could shell out as much as $24 billion in a worst case scenario. This scenario would involve Takata withdrawing 287.5 million of its inflators that contain ammonium nitrate, the chemical tied to airbag ruptures.
Amid news of the recall costs, Takata shares plunged by 20 percent to a record low. That was enough to send the company’s market value to just $302 million, reports Reuters.
Takata said it would slowly transition away from ammonium nitrate in its airbag inflators, but automakers are already abandoning the supplier. Honda and Toyota have vowed to stop using Takata airbag inflators in new models.
Meanwhile, Takata faces a fine of $70 million from U.S. regulators on top of class action lawsuits. Globally, more than 50 million airbags have been recalled as a result of the faulty inflators. Late last year, Takata’s CEO said “there’s risk” when asked whether or not the company would survive.
Takata along with automakers and U.S. regulators are still trying to determine the root cause of the inflator problem. It’s still to be determined exactly how Takata will split the recall costs with automakers.
Pictured above are airbags from the 2015 Chevrolet Sonic — they are not subject to the Takata recall.
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