DieselGate – the Volkswagen Scandal
The Volkswagen scandal has rocked the global automotive industry and destroyed the German car giant’s reputation. The company admits they’ve broken the trust of their customers, dealerships, employees and the public. But what exactly has happened and how did Volkswagen manage to get away with it for so long? And what does the scandal mean for Volkswagen vehicle owners?
What is the Volkswagen Scandal about?
Volkswagen has admitted to cheating on emissions testing after being probed by regulators such as the International Council on Clean Transport (ICCT) and the Environmental Protection Agency (EPA).
The EPA has said that Volkswagen vehicles had software devices planted onto the engines that were able to detect when the cars were being tested.
The devices would then change the performance of the engine accordingly to achieve more favorable test results. The devices put the engine in a type of safety mode, which runs the engine below normal power and performance.
But once the vehicles were actually on the road, the engines switched out of this test mode and would emit nitrogen oxide pollutants up to 40 times more than what is allowed.
It has since emerged that Volkswagen planned this out almost a decade ago.
Timeline of Volkswagen Scandal:
2005: Volkswagen hopes to break into the United States diesel vehicle market and rival United States and Japanese diesel vehicle competitors. However, the United States has the strictest environmental standards when it comes to diesel engines.
2007: Auto parts supplier, Bosch, makes the software device available to Volkswagen for internal testing purposes only. Volkswagen installs the technology into its vehicles destined for sale to the general public, ignoring warnings from Bosch that it was illegal to do so.
2011: A Volkswagen technician discovers the deception and informs the Head of Engine Development, Heinz-Jakob Neusser. Neusser does nothing with the information and Volkswagen continues to install the devices.
2014: The ICCT requests researchers at the University of West Virginia to subject Volkswagen vehicles to road tests. Their findings show that the vehicles emit up to 40 times as much nitrogen oxide than was is legally allowed.
Authorities are informed and Volkswagen is questioned, but the company promptly dismisses these claims as “technical issues” and “unexpected” conditions of use.
Late 2014: Volkswagen recalls a number of vehicles to remedy the problem and tells authorities that the issue is sorted.
May 2015: United States authorities, including the California Air Resources Board (CARB) undertakes new testing, with the results still being unsatisfactory. CARB informs Volkswagen and the EPA of the results.
Mid September 2015: Without a leg to stand on, Volkswagen admits to CARB and the EPA that it had installed software devices into engines in order to skew emissions testing results.
The authorities go public with their findings, and Volkswagen CEO issues an apology for having “broken the trust of our customers and the public”. He also states Volkswagen will comply with authorities.
September 22, 2015: After Volkswagen’s stock market value and shares plummet, the company admits that 11 million cars worldwide have been fitted with the software device. CEO Martin Winterkorn resigns the following day.
September 24, 2015: The European Union urges its member states to investigate whether the Volkswagen vehicles comply with European pollution laws. Private law firms are gearing up file class action suits against the German car giant.
September 25, 2015: Former Porsche boss, Matthias Mueller, is announced as the new Volkswagen CEO. The United States announces a ban on sales of Volkswagen diesel cars until 2016, and Switzerland suspends the sales of new Volkswagen models.
September 28, 2015: A criminal investigation is launched against Martin Winterkorn, with prosecutors stating the aim of the investigation is to “clarify the chain of responsibility”.
October 8, 2015: Volkswagen’s Wolfsburg headquarters are raided.
At a House subcommittee hearing, US Volkswagen CEO Michael Horn admits to being made aware of the non-compliance in early 2014 after the West Virginia University study. But he says he was informed that company engineers would work with the relevant agencies to resolve the issue.
He also claims the devices were the actions of a few rogue software engineers – which no one is buying, not even for a second.
What Volkswagen vehicles are affected?
The 2.0-liter TDI diesel vehicles from both Volkswagen and Audi were fitted with the devices from 2009 to 2015.
The affected Volkswagen models include the Jetta TDI, Passat TDI, Golf TDI, Jetta Sportwagen TDI, and Beetle TDI. The affected Audi models include the 2009 to 2013 A3 TDI and the new 2015 Audi A3 TDI.
The main suspect engine is code named the EA188. The new engine named the EA288 is also involved. You can now check online to see if your vehicle is affected.
What to do if you own a Volkswagen
Volkswagen has announced it will recall all 11 million affected vehicles.
They can either change the software, which will limit engine power output and fuel efficiency, or install treatment systems, which will require significant modification and cost thousands of dollars per car.
In the meantime, vehicle owners just need to sit tight and wait to hear more.
As the actual sale of these vehicles was illegal, owners might not be able to re-register their vehicles or be allowed to sell them until the emissions are brought within the legal limit.
Volkswagen might also offer a buy-back program, although, owners would likely have to settle for far below the market value of their cars.
Long-term consequences for Volkswagen
Following the scandal, CEO Martin Winterkorn lost support of key shareholders and has resigned. Former Porsche boss, Matthias Mueller, has replaced him.
The Volkswagen scandal affects 11 million vehicles worldwide, with an estimated 500,000 of those being in the United States.
The Volkswagen brand and their reputation have taken a huge hit. Kelly Blue Brook predicts that prices for Volkswagen vehicles have fallen 13% since the scandal broke in mid September. Volkswagen has also lost more than $30 billion in stock market value and shares are down 30%.
A recent survey shows more than 50% of respondents indicated that they have complete or general mistrust of Volkswagen. An Auto Pacific survey showed that 75% of Volkswagen owners have negative feelings about the scandal.
Volkswagen could face fines and lawsuits reaching up to $40 billion. They face a fine of up to $18 billion from the EPA alone.
The scandal is likely to lead to a drop in interest for diesel engine cars in general, as well as Volkswagen cars worldwide.
Germany is likely to take a hit as well, as the automotive industry is a driving force behind the strength of its economy.
As more information will be gathered over the next few months, we’re likely to gain a clearer picture of what the Volkswagen scandal means for car owners, and for the future of the company.
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