VW in trouble over alleged US emission test manipulations

[EricE]

article said:

The Environmental Protection Agency on Friday accused Volkswagen of installing software on 482,000 diesel cars in the U.S. to evade federal emission regulations, potentially exposing people to harmful pollutants.

The German automaker adopted what the EPA called a "defeat device" to trick U.S. regulators into believing that its cars met Clean Air Act standards, the federal agency said in a statement.

Volkswagen admitted to investigators that it had installed the defeat device, the EPA said.

The automaker said in a statement that it's cooperating with investigators but won't comment further.

Volkswagen, whose brands include the luxury Audi lineup, may face fines or other penalties, the EPA said. The maximum Clean Air Act violation is $37,500 per vehicle, meaning Volkswagen's fine could technically be as high as $18 billion.

What's more, the scandal could expose Volkswagen to lawsuits and penalties for marketing its cars under the "Clean Diesel" moniker. An hour after the EPA announcement, the automaker's website still contained the "Clean Diesel" branding.

source:
http://www.usatoday.com/story/money/cars/2015/09/1...

Those maximum fines seem rather extreme. VW is already struggling on the US market and this surely won't help them.
I would be surprised to learn that VW is the only company using such "tricks" to manipulate emission tests - US, EU or elsewhere...

Edit: Full PDF here: http://www3.epa.gov/otaq/cert/documents/vw-nov-caa...

Edited by EricE on Friday 18th September 21:19

[EricE]

I do wonder if/how be able to resolve this with a recall.
If they have to lower the total power output to meet the emission goals, won't they open themselves up for new lawsuits because the product they sold is now worse than at the date of purchase?

487,000 vehicles are no joke, not to mention the PR damage as VW already has a quite bad reputation in the USA.

[EricE]

Consumer Reports Strips ‘Recommended’ Rating From VW TDIs

consumer reports said:

Based on the EPA notice of violation against Volkswagen for circumventing emissions testing guidelines, Consumer Reports has suspended its “recommended” Rating of two VW vehicles: The Jetta diesel and Passat diesel. These recommendations will be suspended until Consumer Reports can re-test these vehicles with a recall repair performed. Once the emissions systems are functioning properly, we will assess whether the repair has adversely affected performance or fuel economy.

source

Still no word from VW? According to some forum comments they have issued a sale stop for all diesel models in the USA.

[EricE]

Winterkorn is sorry. VAG stock rate tomorrow morning will be interesting.

article said:

“I personally am deeply sorry that we have broken the trust of our customers and the public,” CEO Martin Winterkorn said in a statement.

source: WSJ

[EricE]

VAG stock is currently (pre-market) trading -9,15% below Friday.

Heads will roll. This all has whiffs of "Revenge of the Piech" about it, wonder if he will make a comeback.

[EricE]

kambites said:

Both tests are pretty stupid.

I agree and can't get my head around the fact that they weren't changed yet.

These emission tests singlehandedly steer engine and car development or rather the whole industry but are completely broken with regards to real life consumption of small turbo engines, plugin hybrids, etc.

[EricE]

South Korea has also announced new emission tests of VW cars... EU is still quiet on this?

http://english.yonhapnews.co.kr/news/2015/09/21/02...

[EricE]

German minister of transport has ordered retesting of all VW Diesel models in Germany.

http://www.handelsblatt.com/unternehmen/industrie/...

[EricE]

JohnMcL said:

The maximum Clean Air Act violation is $37,500 per vehicle, meaning Volkswagen's fine could technically be as high as $18 billion.

That will put the mockers on buying Red Bull in F1.

Absolute "worst case" could even double the figure because they could be forced to buy back all the cars they sold.

Realistically they will get away with a 1-2 billion settlement.

citizensm1th said:

my thoughts exactly. I would not be surprised to find out merc tipped off the feds just to ps off Christian

Zetsche commented that he's "not familiar enough with the VW case to be absolutely sure that Mercedes hasn't violated the same rules".

[EricE]

RobinBanks said:

Doesn't he still own enormous amounts of shares in Volkswagen?

At the moment I bet he's thrilled seeing them 20% lower than Friday.

Anybody who knows his past behaviour will tell you that he would gladly sacrifice a few billions to get revenge on his cousins. People were wondering what he would come up with after the public humiliation in April.
Now this story blew up, less than a week before Winterkorn's contract renewal on Friday . Coincidence? I think not.

If Winterkorn knew about it's bad, if he didn't it's even worse. They will have a very hard time doing PR damage control if they don't fire him.
This turned from a small headline into one of Germany's biggest scandals and the media loves it because it gets people's minds off the refugee crisis. I feel sorry for VW.

[EricE]

AnotherClarkey said:

Why? Obviously I feel sorry for blameless employees and others involved who may suffer but there has to be a penalty for criminal deception on this scale.

Because I am convinced every manufacturer does this to some degree. VW had the bad luck to be the first to be caught.

i.e.

http://www.theicct.org/sites/default/files/publica...

on CO2:

icct said:

the Co2 ratios were consistently around 1.25—i.e., Co2 emissions were, on average, 25% higher than the corresponding type-approval values. sCr-equipped vehicles seem to pay a small penalty (an average Co2 ratio of 1.32) during the neDC tests that is not apparent from WLtC measurements, and which may be related to the neDC cold start.

and NOx:

icct said:

Also, three vehicles equipped with LNTs (Vehicles 18, 6, and 24) had extreme NOX emission levels (1167 mg/km, 708 mg/km and 553 mg/km of NOX, respectively). This is a clear indication that, in some cases, LNT technology is tuned to deliver good performance on the certification test, but not necessarily under the more transient, real-world conditions represented by the WLTC.

18 = Volvo
6 = Renault
24 = Hyundai

[EricE]

News just broke that over 11 Million engines of the type EA189 might be affected worldwide.

Stock just took another -15% dive (down 20% since opening) and almost broke the 100€ mark.

http://www.handelsblatt.com/unternehmen/industrie/...

I repeat, eleven million engines.

[EricE]

And it gets worse... VW allegedly held back information and opened themselves up to shareholder lawsuits:

http://www.welt.de/wirtschaft/article146693326/Hat...

[EricE]

https://twitter.com/harrismonkey/status/6463738782...

and the same idea in a german news paper

http://www.sueddeutsche.de/wirtschaft/vw-skandal-b...

[EricE]

VW stock has lost 10% again and is currently trading below 100€.

[EricE]

dvs_dave said:

as Piech is the true villain here.

Agreed.

[EricE]

Apple has 180 billion Euro cash. Daimler, BMW and VW combined are worth 169 billion Euro after this scandal.
Mental, isn't it?

[EricE]

I'm also interested in what mechanics VW has in place to avoid the group from going under if the fines go through the roof.

My understanding is that technically Volkswagen AG never did any business in the USA, it was all done through "Volkswagen of America", so if the worst case happens USA could sue and seize assets of this shell company but not the actual Volkswagen AG? Wouldn't they need TTIP to go after Volkswagen AG?

[EricE]

BMW stock down 8% since opening. Wonder why!

[EricE]

shalmaneser said:

Largely unfounded market fears (I'll prepare a nice big humble pie just in case though). It's worth noting that 'Vehicle C' above was a BMW X5.

Autobild article which caused BMW stock to tumble

google translation said:

Even the BMW X3 xDrive, the European emission standard is exceeded at road tests of the International Council on Clean Transportation (ICCT) (Euro 6 limit) by more than eleven times. Thus, the car cuts even worse than the situation complained of by the US Environmental Protection Agency VW Passat.
"All measured data suggest that this is not a VW-specific issue," says Peter Mock the ICCT. In tests of his institute the VW vehicles had the Euro 6 limit for the toxic nitrogen oxides (NOx) by an average of more than exceeded 22 times - determined the US Environmental Protection Agency. "Whether other manufacturers use a cheat software except VW, remains to be seen," says AUTO BILD staff Benjamin Gehr.