Tuesday, September 22, 2015

Dirty Trick by Volkswagen Led to Sale of Dirty Diesels in North America

Photo Credit: Chris Nagy


On Monday night, Volkswagen was in New York City wanting focus to be on the premiere of their new 2016 model year Passat sedan. Instead, the German-based auto company was seen largely as the perpetrators of one of the most sinister new-car emission law breaches in current automotive history.

Announced on Friday, September 18th, the United States EPA (Environmental Protection Agency) issued a notice of violation to Volkswagen in regards to members of their diesel engine family sold in North America. Diesel versions of the Volkswagen Beetle, Golf, Jetta, Passat as well as the Audi A3 (a premium vehicle based on the same platform as the Golf) produced in model years between 2009 and 2015 are all embroiled in a wild controversy. Altogether, the total vehicles affected amounts to around 500,000 cars in the United States and Canada. Championed by Volkswagen by a "TDI Clean Diesel", these vehicles powered by a 2.0-liter turbocharged diesel engine have been spewing up to 40 times greater nitrogen oxide (NOx) emissions than the EPA standard causing a greater amount to damage to the environment than intended.

What makes the emission violation so distressing is the manner Volkswagen has allegedly tried to sneak their TDI diesel vehicles into the marketplace. Uncovered by an researchers at West Virginia University, software apparently allowed Volkswagen Group to fool the EPA and North American driving public in general for years that their vehicles were in compliance of emission rules. Referred to by the EPA and defined by the Clean Air Act as a "defeat device", software could detect when an emission test was underway and activate the vehicle's full emission control systems. During regular on-road driving, the defeat device allowed greenhouse emissions greater than the levels tested to flow out of the exhaust system.

With the announcement of the non-complying emissions as well as news investigations by the EPA and CARB (California Air Resources Board), Volkswagen confirmed that defeat devices were in the affected vehicles. "I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to 
clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter." said in a statement by Volkswagen AG CEO Prof. Dr. Martin Winterkorn.

While the announcement was revealed on a Friday, it wasn't until the three days later on Monday that Volkswagen met a major fire-storm. The stock price of the company was hammered hard in just a single day. Starting Monday's session in the 162-163 Euro price range per share, the value has fallen more than 30 points 24 hours later. At dealerships, customers are unable to purchase the affected TDI models. With only a short time passing since the revelation, Merchant Law Group has filed a case action lawsuit in British Columbia's Supreme Court was filed on Monday. The law firm also pledges that similar suits will be before courts in Alberta, Ontario and Quebec in the coming days.

The fallout of this is environmental violation by Volkswagen Group appears to still be reaching a pike. Civil penalties as well as potential criminal charges are possible in the United States that could amount up to 18 billion dollars (though a settlement for less is highly likely). The defeat device software also has other countries such as South Korea investigating emissions of Volkswagen and Audi products sold on their soil.

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