It’s been more than six weeks since the U.S. Environmental Protection Agency issued German automaker Volkswagen AG and its associated brands Audi and Porsche with an official Notice of Violation under Part A of Title II of the Clean Air Act for purposefully installing a software defeat device specifically designed to cheat emissions testing in certain 2009 through 2015 diesel light-duty vehicles equipped with 2.0-litre, four-cylinder diesel engined vehicles.
On Monday, the EPA filed an additional Notice of Violation against Volkswagen AG, specifically ones with Volkswagen’s V-6 3.0-litre diesel engine. Like the first instance, the EPA alleges vehicles fitted with this engine also feature illegal defeat devices designed to cheat emission tests. While Volkswagen admits placing cheat devices in its 2.0-litre diesel engine however, it denies doing so with the larger v-6 diesel engine, although went ahead with a stop sale for all Volkswagen and Audi 3.0-litre V6 TDI vehicles earlier this morning.
Now there’s a new revelation to accompany the first and second bombshells: that some of Volkswagen’s other diesel and gasoline engines may also be emitting more pollution than officially stated. But instead of coming from a governmental agency, this particular piece of news comes direct from Volskwagen itself.
Making the announcement yesterday in an official press statement released late in the afternoon local time, Volkswagen said that its own internal investigations into the Dieselgate scandal revealed what it calls ‘irregularities’ when determining type approval CO2 levels for various diesel and gasoline engines.
For those unfamiliar with European automotive testing, the term ‘Type Approval’ in this case refers to the set of technical requirements which all new vehicles must meet in order to be approved for sale in the European Union. This process not only ensures that the vehicles meet basic safety and mechanical standards but also follow rules pertaining to lighting and vehicle function alongside emissions.
Simply put, a vehicle which does not meet the requirements is not authorised for sale in the EU.
According to Volskwagen’s own press release, some 800,000 Volkswagen AG vehicles, mostly fitted with 1.4-litre diesel engines, may have been incorrectly set up when undergoing testing, resulting in fuel economy figures which were too high and emission figures which were too low when compared to ‘real world’ use.
Affected vehicles, most of which are in Europe, include Volkswagen’s popular Polo subcompact, as well as the Volkswagen Golf. Other brands owned by Volkswagen, including Audi, Seat and Skoda, are also affected. The issue also affects gasoline-engined (petrol) vehicles made by Volkswagen, which Germany’s Transport Minister Alexander Dobrindt said earlier today will number 98,000 cars in Germany alone.
This latest chapter in the story of incompetence (and perhaps corporate villainy) which is Volkswagen’s emissions scandal has already caused shares in the Volkswagen Group to plummet by 9.5 percent in the past twenty-four hours to near the same lows experienced at the start of October and which could push the company share price to financial-crisis lows of well under $80 per share.
But the stock price should be the least of Volkswagen’s worries. As commentators in Europe have already noted, overly-optimistic, incorrect fuel economy readings and higher-than stated emissions will open the floodgates to what could be one of the biggest lawsuits ever instigated by car buyers as restitution is sought for the hundreds of thousands of customers who purchased a car on incorrect economy figures. And that’s before you take into consideration the effect of the massive losses suffered by existing VW owners whose vehicle values have plummeted amidst the ongoing crisis.
Then there’s the matter of regulatory fines and subsidy repayments. With VW facing billions of dollars of fines worldwide for just the first part of the scandal, the two revelations from this week mean that Volkswagen will have to dig even deeper to atone for its sins. And with many European countries already announcing their intention to fine VW for the money offered to VW customers in subsidies for buying low-emission vehicles which are now proven not to be, Volkswagen will likely be brought to its knees.
Now, there’s only one solution. Come clean, and execute a massive about-turn in corporate accountability and future product planning, dumping the internal combustion engine completely to focus on far more sustainable and environmentally-responsible drivetrains instead.
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