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Written by: Cory Watson Attorneys

VW Scandal: German Automaker Misled Public and Regulators for Years

| Read Time: 5 minutes

VW_logoBy now, you may have heard about the unfolding scandal that has engulfed German automaker Volkswagen. On September 18, the EPA revealed VW had brazenly violated U.S. emissions standards by installing hidden software, called “defeat devices,” in its “clean diesel” models that could detect when cars were being tested for emissions.  Pollution controls only worked when the cars were undergoing testing; otherwise, the cars would discharge harmful nitrogen oxides (NOx) up to 35 times over the legal limit.

What did VW do?

On September 22, VW admitted that 11 million of its clean diesel cars sold globally were installed with defeat devices – carefully hidden software intended to deceive environmental regulators. Around 482,000 vehicles in the United States are affected by the problem.

The software in the involved VW diesel models could detect when the vehicles were undergoing regulators’ inspection tests, which include emissions testing.  EPA testing practices are known by automakers, and typically involve putting the vehicle on rollers and running it at certain speeds for specific amounts of time. When the software sensed the car was undergoing testing, it would instruct the engine and its NOx scrubber to activate all anti-pollution measures.

The vehicles in question ran normally without these measures.

Why VW did it?

Volkswagen has yet to provide an official explanation for why it cheated emissions regulations, although there is plenty of speculation.  As Vox.com points out, you need to understand some basic differences between diesel and gasoline engines to wholly grasp the VW controversy.

The main advantage of diesel is fuel economy: the normal diesel automobile can travel about 30 percent farther than its gasoline equivalent on the same amount of fuel.  Diesel cars also produce fewer carbon-dioxide (CO2) emissions.

The trade-off for improved mileage, however, is that diesel-burning vehicles produce far more NOx emissions, which are particularly harmful to human health and are a major source of smog.

Unlike Europe, where diesel cars are far more popular, the United States has imposed much stricter regulations since the 1970s on these sorts of emissions, helping to explain why diesel hasn’t caught on here up until recently.  However, since the Obama administration began ramping up fuel-economy standards in 2009, the premium placed on better mileage has increased.  Advancements in engines and emissions-control technologies, along with lower-sulfur fuel have combined with these new efficiency rules to give automakers incentive to pursue “clean diesel” vehicles.

You’ve probably seen the television commercial with the sarcastic grandmothers whipping around a test course in a diesel VW Golf, the selling point being that the automaker’s new diesels debunk old wives’ tales about being slow and underperforming.

However, a problem with clean diesel technologies, including NOx emissions controls, is they tend to degrade performance by making engines run hotter and wear out faster, while also reducing mileage – a key selling point of diesel.  Emissions controls can also negatively affect acceleration and torque, negating the sort of claims VW makes in the aforementioned ad.

Ultimately, Volkswagen may have decided to cheat emissions regulations because it wasn’t able to deliver on diesel cars that were simultaneously “clean,” preserved fuel economy, and achieved desired performance – or at least not at VW’s desired profit margin.

How was VW caught?

An independent group called the International Council on Clean Transportation (ICCT) conducted on-road emissions tests on Volkswagen’s clean diesel Jetta and Passat, designed to mimic the laboratory tests run by the EPA.  This real-world testing showed a large discrepancy from the lab-based emissions figures for these cars.  EPA and California regulators approached VW in May 2014 and ordered the automaker to investigate and fix the problem, which it claimed it did.  Again, laboratory and real-world testing figures did not match up, at which point EPA regulators turned up the heat on VW – threatening to withhold approval on the company’s 2016 diesel line.  Perhaps realizing the gig was up, VW admitted to the EPA the existence of defeat devices in its clean diesel cars.

VW scandal highlights testing problems

Volkswagen’s use of defeat devices to dupe emissions regulators isn’t the first incident of its type – in fact, it’s not even a first for VW.  In 1974, VW settled with the EPA for $120,000 for failing to properly disclose information about two devices that changed emissions controls in about 25,000 1973 models. VW admitted no wrongdoing in that case. More recently, in the 1990s, General Motors, Ford, and the American Honda Company have all had to pay millions of dollars to resolve similar cases.

These recurring scandals are at least partially attributable to the fact that regulators’ tests are easy to predict (they occur in laboratory settings and look for certain specific variables), and therefore are easier to game.  The predictability of these tests is also supplemented by automakers’ development of increasingly advanced software that can fine tune and control engines. These factors work together to give some manufacturers a motivation to cheat the system.

Thus, VW’s current predicament probably won’t be the last of its type.  Indeed, revelations from the current scandal have watchdogs and regulators now looking at other clean diesel vehicles.

Bloomberg reported September 24 that BMW is now under threat, too, after a diesel version of its X3 model had been found to exceed European emissions regulations.  Given the drawbacks of clean diesel technology on performance, it is likely (if not probable) that other automakers have engaged in similar behavior as VW.

Affected models

Volkswagen is expected to recall the following affected diesel models:

  • VW Golf 2.0L TDI (2010-2015)
  • VW Jetta 2.0L TDI (2009-2015)
  • VW Beetle 2.0L TDI (2012-2015)
  • VW Passat 2.0L TDI (2012-2015)
  • Audi A3 2.0L TDI (2010-2015)

At present, VW has not yet started mailing owners notices to take their cars into the dealership.  It isn’t clear at this point what VW’s plan will be to fix the problem, although it could be as simple as modifying the fraudulent software. The EPA says affected vehicles do not pose a safety risk and remain legal to drive.

The sale of 2015 and 2016 VW diesel models has been halted for the time being.

The next step

Per EPA rules, Volkswagen could be fined up to $37,000 per vehicle sold with the problem software: this could amount to a total fine of up to $18 billion.  Additionally, the company already has set aside $7.3 billion to spend on fixes and compensation.

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Cory Watson Attorneys believes that manufacturers need to be held responsible when they intentionally mislead regulators and the public; to do otherwise gives them an undeniable incentive to cheat in future situations – with potentially fatal consequences.

Volkswagen thought it could outsmart the laws of our country, and breached the trust of its consumers for years.  A lot of people bought the German automaker’s supposedly “clean” diesel cars out of an earnest desire to do their small part to help the environment.  Volkswagen exploited their customers’ good intentions by selling them a false bill of goods.

 

Picture source http://allfree-themes.com/cat/14/volkswagen-logo-01.html

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