EPA: Time Is Running Out For VW To Fix Dieselgate Cars in U.S., And It May Not Reach A Deal By April 21 Deadline

At some point in the not-too-distant future, we’re pretty sure business, management and media relations classes around the world will use Volkswagen and its handling of the Dieselgate Scandal as a demonstration of how not to handle a major crisis.

Now we’re pretty sure it will be an example of how not to deal with government agencies too.

That’s because we’re fast approaching April 21, the deadline given to the German automaker by a U.S. Federal District Court last month by which it must submit plans to the court to not only bring more than 580,000 non compliant diesel-engined vehicles in line with the Clean Air Act but also gain regulatory approval for those plans from the U.S. Environmental Protection Agency and the California Air Resources Board.

The deadline for negotiations to end is fast-approaching.

The deadline for negotiations to end is fast-approaching.

While EPA Administrator Gina McCarthy told reporters yesterday that it and Volkswagen are still in “really robust” talks about how to resolve the dieselgate emissions scandal, she admitted that it’s not clear yet if Volkswagen and the EPA will be able to agree on a final plan ahead of the April 21 deadline.

The deadline was given to both parties by U.S. Federal District Judge Charles Breyer last month as part of an ongoing Federal case being brought by the U.S. Justice Department against Volkswagen for purposely programming the emissions control systems of certain model-year diesel-powered Volkswagen, Audi and Porsche vehicles with a special mode designed to cheat emissions testing.

More than 580,00 cars in the U.S. alone are affected.

More than 580,00 cars in the U.S. alone are affected.

That mode, which regulators have referred to as a “cheat switch,” was designed to detect if a car was being tested on a rolling road (dynamometer) or being driven on the public highway. If the former was detected, code within the unit ensured that tailpipe NOx levels were kept within compliance with limits set by the EPA and enforced through the Clean Air Act. If the latter condition was detected, the software was programmed to bypass all emissions controls completely, emitting up to 40 times the legally allowed NOx limits in preference for improved fuel economy and better performance.

While Volkswagen initially denied the existence of such a device, it eventually admitted to CARB and the EPA that such a device did exist in certain 2.0-litre diesel-engined cars sold in both Europe and the U.S. A month or so later, it admitted a similar device existed in larger 3.0-litre V-6 TDI diesel engines used in certain model-year Volkswagen, Audi and Porsche models.

At the moment, how Volkswagen will be expected to make amends for its purposeful disregard of emission regulations isn’t entirely known. In addition to paying $46 billion in fines to the U.S. Justice Department for violated federal law, one option on the table is for Volkswagen to bring affected cars into compliance through reprogramming of their emissions control systems or retrofitting new exhaust components, buying back cars that cannot be brought into compliance due to their age or engineering limitations at full (original) sticker price.

Until the debacle is resolved, VW or its sister companies must refrain from selling diesel cars in the U.S.

Until the debacle is resolved, VW or its sister companies must refrain from selling diesel cars in the U.S.

Another option supported by Tesla CEO Elon Musk and more than 40 other business leaders across the world would be for Volkswagen to be forced to build as many electric cars as it would take to offset the carbon emissions of the noncompliant VW cars currently on the roads of the U.S. That process, which ultimately would have a lower net carbon footprint than the first, would also serve as a way to encourage more people to switch from diesel or gasoline to electric vehicles by increasing market choice and availability of plug-in cars. But as we reported earlier this year, Volkswagen doesn’t seem too keen on this particular solution, despite recently unveiling a 200+ mile electric car that we think has the capability to turn the brand’s reputation around.

While it’s not completely clear if Volkswagen will reach an agreement with the U.S. Justice Department, EPA and CARB by the April 21 deadline, we’d suggest doing so would be in Volkswagen’s best interests.

Not doing so — and continuing to delay the ultimate fix for diselgate cars — could be just another nail in Volkswagen’s coffin.


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  • The most likely scenario …

    Whether or not VW reachEd an agreement with the EPA or not, they will make news on Earth Day 2016 (Apr 22).

    Perhaps a little incentive for VW to share a message that will generate positive PR. 😉

  • Ed

    Watching Dieselgate play out is very discouraging. The multiple lawsuits and agency wrangling show that our laws and enforcement processes do not deal well with such technical matters. More than half a year after Volkswagen’s admission of gross wrongdoing, it is all but certain that there will be no “full fix” possible for existing vehicles. Victims in this set of crimes are everywhere: car owners, dealers, local populations, the global population and the honest automakers who have played by the rules; solutions must balance the needs of all victims. It seems to me that a bold action plan will be required. Let me propose these elements for consideration:

    Firstly, a number of bad players at VW – top to bottom – need to go to prison. No one is going to be satisfied until this happens. Automakers must see that there are consequences to such cynical, illegal activities. Higher ethical standards must be encouraged by the threat of punishment.

    Independent investigations of other automakers must assure fairness; other violators must be found, fined and punished.

    If there is any software tweak or component change that can significantly reduce emissions on existing vehicles and does not exceed $100 in component cost, then this should be implemented.

    VW should have its future emission requirements adjusted so that its historic fleet emission averages are in compliance within 20 years. The cheating started in 2009, so by the end of 2028, VW fleet’s average emissions over those 20 years of production must average out in compliance with total emissions the fleet would emit during those years. Let’s call this the Volkswagen Special Fleet Average Emissions (VWSFAE) plan.

    The VWSFAE plan would require VW’s future cars to be extremely clean. In the calculus, a zero emission vehicle would receive credit as five vehicles when calculating the fleet average emissions. The value in building zero-emission vehicles becomes obvious.

    An independent committee would track VW’s progress and forecasts to project any 2028 VWSFAE shortfall. Each year, VW would be required to escrow a per-vehicle fine based on the amount of the miss, as long as the 2028 production year fleet emissions average is less than 80% of the then-existing requirement. The assumption is that VW would begin immediately raising vehicle prices to create any escrow funds to cover any projected shortfall. This should give advantage to VW’s competitors if VW is lagging in compliance.

    The varying emission standards around the globe create added development costs and vehicle costs. The auto industry should have its burden reduced by fully harmonizing vehicle emission standards globally. Perhaps there is a negotiation role for the United Nations in getting this done.

    Such a plan might ultimately be seen as a “reward” to VW verses its competition. After all, despite the heavy cost to VW in coming years, VW might well emerge in 2029 as the most cost-effective maker of low- and zero-emission vehicles. VW’s success might even encourage us to raise emission standards for all vehicles. In my view, other manufacturers should see VW’s actions as a model for what a successful automaker will look like in the future….and they would therefore have encouragement to respond.

    I believe this kind of plan, while not perfect, addresses the needs of all stakeholders.

    • “VW should have its future emission requirements adjusted so that its historic fleet emission averages are in compliance within 20 years. “

      Nice idea, but did you do the math on that before writing it down? VW cars emitted multiple times the allowed values, and with exceedingly stringent future norms, their cars should emit negative emissions to achieve that. haha.

      • Ed

        Obviously, there are plenty of assumptions in the proposal. Firstly, for those 600,000 existing offending cars, I am not proposing that the buyers suffer a significant loss in fuel economy. So, I assumed their emissions (focus just on NOX, for now) could only be cut in half with software and low cost hardware changes. So, these cars would offend at 5X today’s standard after fixes.

        For simplicity, assume that VW sells 600,000 cars in each five-year period of the 20 year period proposed. In the current (second) five-year period, assume no change in product mix, but all new cars sold gasoline and are in compliance.

        In the final two five-year periods, assume that VW sells 600,000 cars, half of which are zero emission vehicles. Keep in mind, in the math, the ZEVs count as five vehicles in the denominator.

        When done, VW’s fleet average emissions over the 20 year period meet the standard, despite the earlier 600,000 offending vehicles. And, many of those earlier vehicles will already have been removed from service, Then, consider that the 2028 VW non-ZEV fleet would be operating at 80% of NOX emission standard. VW’s actual fleet per-vehicle emissions would be less than half of the 2080 standard.

        Yes, a lot of assumptions, it takes many years to get there, and it IS a compromise. But as you can see in the dueling going on between VW and the various government agencies here and abroad, the ultimate solution requires compromise.

        Sometimes, life only give us two choices: chose NO or chose YES while holding your nose. This is one of those choices.