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Volkswagen ‘clean diesel’ scheme

Volkswagen admitted to methodically cheating on U.S. air emissions tests for years, to make nearly half a million diesel cars seem cleaner-burning than they are, the Environmental Protection Agency announced Friday in citing violations that could add up to $18 billion in fines. The company said it has also been alerted from the Justice Department, which the EPA said could pursue legal action.

The automaker enlisted a strategy advertising the efficiency of their fun-to-drive, powerful, “clean diesel” vehicles. Diesel versions of their most popular cars comprise more than a quarter of the brand’s sales in the U.S. and are a vital part of the company’s strategy for meeting tougher U.S. fuel economy standards going to effect in coming years. VW chose to specialize in diesel technology instead of electrics or hybrids.

“They were counting heavily on diesels to meet the fuel-economy numbers,” Matt DeLorenzo said, managing editor for news at Kelley Blue Book in Irvine, California. “This brings that whole strategy into question.”

VW TDI
“Volkswagen admitted to methodically cheating on U.S. air pollution tests for years, to make nearly half a million diesel cars seem cleaner-burning than they are.

VW employed a sophisticated algorithm, installed in the emissions-control modules that could detect when a vehicle was undergoing official emissions testing and turn on full pollution controls. The EPA referred this algorithm a “defeat device.” During normal driving, the cars pollute 10 to 40 times the legal standard for NOx, a component in urban smog, the agency estimated.

Financial liability for the company is unclear. The EPA could fine the company $37,500 per violation of the law and harm to the environment, which could equate to over $18 billion in fines.

Volkswagen AG Chief Executive Officer Martin Winterkorn resigned after the scandal, after almost a decade in charge, Winterkorn stepped down. He expressed that he accepted the consequences of the mushrooming scandal that has wiped $22 billion off the company’s market value.

In order to “fix” the issue, Volkswagen has said that most of the affected cars will just need a software update, presumably to the engine always runs during the EPA testing, and always meets emission standards. That’s bad for drivers, because to be NOx emission standards, the cars in test mode sacrificed some fuel economy and performance.

Volkswagen announced on Sunday that it was suspending the sales of cars in the United States that had the defeat device.

The investigation is still ongoing.