Volkswagen emissions scandal
The Volkswagen emissions scandal, sometimes known as Dieselgate[24][25] or Emissionsgate,[26][25] began in September 2015, when the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group.[27] The agency had found that Volkswagen had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate their emissions controls only during laboratory emissions testing, which caused the vehicles' NOx output to meet US standards during regulatory testing. However, the vehicles emitted up to 40 times more NOx in real-world driving.[28] Volkswagen deployed this software in about 11 million cars worldwide, including 500,000 in the United States, in model years 2009 through 2015.[29][30][31][32]
"Dieselgate" and "Emissionsgate" redirect here. For other diesel emissions scandals, see Diesel emissions scandal.Date
2008–2015
Worldwide
Dieselgate, Emissionsgate
Emission standard violations
Engaging full emissions control only during testing
International Council on Clean Transportation, West Virginia University, Volkswagen Group, US EPA, other regulators
Fines and lawsuits
New US Tier 2 rules established to replace Tier 1. NOx limit decreasing from 1.0 g/mi to 0.07 g/mi
Phase-in period of diesel emissions rules
US Tier 2 fully in effect,
Volkswagen TDI cars go on sale in US. In Europe, some models are now being described as Euro emission class 5, a change from class 4 in 2008.[3][5]
Volkswagen diesel sales in the US rebound, Clean Diesels win several environmental awards, receive tax breaks
International Council on Clean Transportation asks WVU CAFEE to help demonstrate the benefits of US diesel technology, hoping to have Europe follow suit
Instead, CAFEE finds discrepancies showing poor on-road emissions. Results presented at public forum and published, getting attention of EPA
EPA repeats tests, and contacts Volkswagen for explanation of poor real world NOx emissions
Volkswagen orders voluntary recall of TDI cars but CARB and EPA not satisfied
EPA threatens to not certify 2016 diesels, Volkswagen responds by admitting software was programmed to cheat testing
Public announcement by EPA of order to recall 2009–2015 cars
Volkswagen admits deception, issues public apology
First business day after news, Volkswagen stock down 20 percent
Volkswagen to spend $7.3B to cover costs of scandal; stock declines another 17 percent
CEO Martin Winterkorn resigns
Volkswagen announces plans to refit up to 11 million vehicles affected by the emissions violations scandal
Volkswagen sets up an online based service on which customers can check if their car is affected based on the vehicle identification number
Volkswagen US CEO Michael Horn testifies before US Congress
Volkswagen's investigation finds that CO2 emissions and fuel consumption figures are also affected by "irregularities".[6]
Volkswagen revises previous estimates on CO2 emissions irregularities, saying that only around 36,000 vehicles are affected.[9]
Volkswagen US CEO Michael Horn resigns, citing a "mutual agreement" with the company.[10]
Volkswagen announces that it will offer its US customers "substantial compensation" and car buyback offers for nearly 500,000 2.0-litre vehicles.[11]
Regulators in California discover that Audi engines were rigged to produce lower CO2.[12]
FBI arrests emissions compliance manager Oliver Schmidt in a Florida airport restroom on a charge of conspiracy to defraud the United States.[13]
Ex-CEO Winterkorn is indicted on fraud and conspiracy charges in the US[16]
In connection with the case, Audi CEO Rupert Stadler is arrested in Germany.[17]
Audi agrees to a fine of €800 million in Germany to resolve civil claims over duty to oversight (Verletzung der Aufsichtspflicht in Unternehmen)[18]
US SEC alleges that Volkswagen AG, Martin Winterkorn, et al. defrauded investors and files suit in N.D. Cal.[19]
Winterkorn and four other executives are charged by prosecutors in Braunschweig, Germany.[20]
Pötsch, Diess, and Winterkorn are charged with stock market manipulation by prosecutors in Germany.[22]
Six additional individuals are charged by prosecutors in Braunschweig, Germany.[23]
Background[edit]
Introduction[edit]
In 2013, the International Council on Clean Transportation (ICCT) commissioned the West Virginia University Center for Alternative Fuels Engines and Emissions (WVU CAFEE) to test on-road emissions of diesel cars sold in the U.S.[33][34][35] Researchers at WVU CAFEE, who conducted live road tests in California using a Japanese on-board emission testing system, detected additional nitrogen oxide (NOx) emissions from two out of three tested vehicles, both made by Volkswagen.[34][35][36][37] In May 2014, ICCT published WVU CAFEE's findings and reported them to the California Air Resources Board (CARB) and the United States Environmental Protection Agency (EPA).[38][39]
In September 2015, the EPA announced that Volkswagen had violated the Clean Air Act by installing unlawful software into their diesel vehicles.[40] Regulators in multiple countries began to investigate the automaker,[40] and its stock price fell in value by a third in the days immediately after the news. Volkswagen Group CEO Martin Winterkorn resigned, and the head of brand development Heinz-Jakob Neusser, Audi research and development head Ulrich Hackenberg, and Porsche research and development head Wolfgang Hatz were suspended.[41]
Volkswagen announced plans in April 2016 to spend €16.2 billion (US$18.32 billion at April 2016 exchange rates) in relation to the scandal,[42] and agreed in June 2016 to pay up to $14.7 billion to settle civil charges in the United States.[43] In January 2017, Volkswagen pleaded guilty to criminal charges and signed an agreed Statement of Facts, which set out how the company's management asked engineers to develop the defeat devices, because its diesel models could not pass US emissions tests without them, and deliberately sought to conceal their use.[44] In April 2017, a US federal judge ordered Volkswagen to pay a $2.8 billion criminal fine for "rigging diesel-powered vehicles to cheat on government emissions tests".[45]
Winterkorn was charged in the United States with fraud and conspiracy on 3 May 2018.[16] As of 1 June 2020, the scandal had cost VW $33.3 billion in fines, penalties, financial settlements and buyback costs.[46] Various government and civil actions are currently ongoing in the U.S., as well as the European Union, where most of the affected vehicles are located; while they remain legal to drive there, consumers groups and governments seek to make sure Volkswagen has compensated these owners appropriately as they had to do in the United States.
The scandal raised awareness over the higher levels of pollution emitted by all diesel-powered vehicles from a wide range of car makers, which under real-world driving conditions exceeded legal emission limits. A study conducted by ICCT and ADAC showed the biggest deviations from Volvo, Renault, Jeep, Hyundai, Citroën and Fiat,[47][48][49] resulting in investigations opening into other diesel emissions scandals. A discussion was sparked on the topic of software-controlled machinery being generally prone to cheating, and a way out would be to open source the software for public scrutiny.[50][51][52]
NOx and Volkswagen Diesel anti-pollution system[edit]
In general, diesel engines have better fuel efficiency and less carbon dioxide (CO2) emission than petrol engines, but they emit 20 times more nitrogen oxide (NOx) unless somehow treated, and three-way catalytic converters, which have been very effective at reducing NOx in petrol engine exhaust, do not function well for them.[53][54] As NOx are harmful air pollutants, regulators in the United States and Europe have implemented increasingly stringent NOx emission standards for passenger cars since the early 2000s.[55][54]
To deal with this problem, in 2005 Volkswagen licensed Mercedes' urea-based selective catalytic reduction (SCR) system called BlueTec for future diesel engine development.[56][53] While effective at reducing NOx, an SCR system like Bluetec was expensive, high-maintenance and required more space than other methods, making it unsuitable for Volkswagen's compact cars such as Golf or Jetta.[57][53] Some managers at Volkswagen rejected BlueTec, and preferred to develop their own inexpensive "lean NOx trap" system.[53][58][59][56] In 2007, Volkswagen canceled the licensing deal for BlueTec and announced that it would use its own pollution control technology.[56][59]
Volkswagen chose the "lean NOx trap" system for its turbo-diesel Golf and Jetta models, but the solution did not work well as it required a fuel-rich exhaust gas in the purification process and fuel economy suffered as a result.[53] Nonetheless, the company promoted the technological miracle of fast, cheap, and green diesel vehicles – but the impression projected to outsiders did not reflect the reality.[53][54]
In reality, the system failed to combine lower fuel consumption with compliant NOx emissions, and Volkswagen chose around 2006[60] to program the Engine Control Unit (ECU) to switch from lower fuel consumption and high NOx emissions to low-emission compliant mode when it detected an emissions test, particularly for the EA 189 engine.[53] This caused the engine to emit NOx levels above limits in daily operation, but comply with US NOx standards when being tested, constituting a defeat device.[59][61] In 2015 the news magazine Der Spiegel reported that at least 30 people at management level in Volkswagen knew about the deceit for years, which Volkswagen denied in 2015.[62]
Starting in the 2009 model year, Volkswagen Group began migrating its light-duty passenger vehicle's turbocharged direct injection (TDI) diesel engines to a common-rail fuel injection system. This system allows for higher-precision fuel delivery using electronically controlled fuel injectors and higher injection pressure, theoretically leading to better fuel atomization, better air/fuel ratio control, and by extension, better control of emissions.[63][64][3][4][65]
Volkswagen described the diesel engines as being as clean as or cleaner than US and Californian requirements, while providing good fuel economy and performance.[66][67]
Due to the good fuel economy provided by its diesel fleet, in 2014 Volkswagen was registered with a Corporate Average Fuel Economy (CAFE) of 34 mpg‑US (6.9 L/100 km; 41 mpg‑imp).[68] The low emissions levels of Volkswagen vehicles tested with the defeat device in operation enabled the company to receive green car subsidies and tax exemptions in the US.[69]
Monkeygate[edit]
In January 2018, it was revealed that Volkswagen had experimented on monkeys in May 2015 to prove that diesel exhaust was not harmful to primates. The disclosure of the tests was named Monkeygate.[415][416] However, the test car was a Volkswagen Beetle fitted with the defeat device that produced far less emissions in the experiment than it would on the highway.[417][418] Volkswagen's top lobbyist, Thomas Steg, was suspended on 23 January 2018.[419]
Reactions[edit]
Political figures[edit]
German Chancellor Angela Merkel stated she hoped that all facts in the matter would be made known promptly, urging "complete transparency". She additionally noted that Germany's Transport Minister, Alexander Dobrindt, was in ongoing communication with Volkswagen.[420]
Michel Sapin, the French Finance Minister, called for an investigation of diesel-powered cars that would encompass the entire continent of Europe.[421]
Catherine Bearder, MEP for South East England, commented on 27 October 2015 in the European Parliament that "we now have the political momentum for a radical overhaul that will ensure carmakers cannot dodge the rules", defending an EU resolution meant to specifically "cut deadly pollution from diesel vehicles".[240] However, when the European Commission proceeded with passing legislation that allowed the car industry more time to comply with the newer regulation, while also permitting cars, even under the more "realistic" tests, to emit more than twice the legal limit of nitrogen oxides (NOx) from 2019 and up to 50 percent more from 2021, Bearder denounced the legislation as "a disgraceful stitch-up by national governments, who are once again putting the interests of carmakers ahead of public health".[241]
London Assembly member Stephen Knight suggested on 1 November 2015 that diesel vehicles should either be banned in the future, or face stringent tests before being allowed to enter London's low-emissions zone. The city's deputy mayor for the environment, Matthew Pencharz, responded that such measures could lead to serious economic problems.[422]
Automotive industry and other commentators[edit]
Major car manufacturers, including Toyota, GM, PSA Peugeot Citroen, Renault, Mazda, Daimler (Mercedes Benz), and Honda, issued press statements reaffirming their vehicles' compliance with all regulations and legislation for the markets in which they operate; The Society of Motor Manufacturers and Traders described the issue as affecting "just one company", with no evidence to suggest that the whole industry might be affected.[423]
Renault-Nissan CEO Carlos Ghosn said it would be difficult for an automaker to conceal internally an effort to falsify vehicle emissions data, such as has happened at Volkswagen AG: "I don't think you can do something like this hiding in the bushes."[424]
Jim Holder, the editorial director of Haymarket Automotive, which publishes WhatCar and AutoCar, opined that there had never been a scandal in the automotive industry of this size.[425]
A commentary in Spiegel Online argued that the Volkswagen scandal will affect the entire German industry, and that German companies operating abroad will face a decrease in competitiveness.[426]
Alan Brown, chairman of the Volkswagen National Dealer Advisory Council, commented on the scandal's negative impact on US dealers, who were already struggling with overpriced products and a deteriorating relationship between the company and the dealer body.[427] Car and Driver similarly emphasized Volkswagen's inability to efficiently operate in the US market, while also suggesting that the company had grossly underestimated the EPA's power, and inexplicably failed to go public before the story broke, despite receiving ample warning.[428]
Tesla Motors CEO Elon Musk was asked about his opinion whether the scandal will weaken the consumer's view on green technologies; he responded saying he expects the opposite to happen: "What Volkswagen is really showing is that we've reached the limit of what's possible with diesel and petrol. The time has come to move to a new generation of technology."[429]
Similarly, analysts at Fitch suggested the Volkswagen diesel emissions crisis was likely to affect the entire automotive industry, with petrol cars potentially enjoying a revival in Europe and greater investment being poured into electric vehicles.[80] Other commentators argued that the diesel engine will nevertheless regain its footing in the market, due to its international indispensability, low CO2 emissions and strong presence in the US pickup– and commercial–truck segments.[428]
On 29 September 2015, S&P Dow Jones Indices and RobecoSAM stated that Volkswagen AG's stock will be de-listed from the Dow Jones Sustainability indexes after close of trading on 5 October 2015. Among the reasons for the de-listing, the statement issued by RobecoSAM cited social and ethical reasons, and confirmed that Volkswagen will no longer be identified as an Industry Group Leader in the "Automobiles & Components" industry group.[430]
In early October, Green Car Journal rescinded its Green Car of the Year awards, for models that "best raise the bar in environmental performance", that were given to the 2009 Volkswagen Jetta TDI and 2010 Audi A3 TDI models.[431]
In December 2015, a group of business and environmental leaders, including Tesla CEO Elon Musk, addressed an open letter to CARB, urging the agency to absolve Volkswagen of recalling the 85,000 diesel vehicles affected by the scandal in the US, and argued that Volkswagen should instead be asked to allocate resources to an accelerated rollout of zero-emissions vehicles ("cure the air, not the cars"). The letter, which includes a 5-step legally enforceable plan, argues that this course of action could result in a "10 for 1 or greater reduction in pollutant emissions as compared to the pollution associated with the diesel fleet cheating", while suggesting that the affected vehicles on the road in California "represent an insignificant portion of total vehicles emissions in the State" and "do not, individually, present any emissions-related risk to their owners or occupants".[432][433] Similar requests were put forward by the American Lung Association, who petitioned the EPA to determine Volkswagen to promote zero-emissions vehicles, build sustainable transport infrastructure and retrofit older diesel models with superior emissions controls.[434]
Volkswagen got a 2016 Ig Nobel Prize in chemistry from the scientific humor magazine Annals of Improbable Research for "solving the problem of excessive automobile pollution emissions by automatically, electromechanically producing fewer emissions whenever the cars are being tested".[435]
Media[edit]
The Volkswagen TDI emissions scandal has received widespread negative media exposure,[436][437][438][439][440][441] with headlines fronting the websites of multiple news gathering and reporting organizations.[66][113][442][443] Reuters said that the crisis at Volkswagen could be a bigger threat to the German economy than the consequences of the 2015 Greek sovereign debt default.[444] Deutsche Welle, one of Germany's state broadcasters, said that a "lawsuit tsunami" was headed for Volkswagen and that the scandal had dealt a blow to the country's psyche and "Made in Germany" brand.[445] Popular Mechanics said that the scandal "is much worse than a recall", highlighting that Volkswagen had engaged in a pattern of "cynical deceit".[446]
The Volkswagen emissions cheating scandal has joined the ranks of other -gate suffix stories, with media coining both Dieselgate and Emissionsgate to describe it.[162][174][220][447][448][449]
Public polling[edit]
Despite the scandal, one poll conducted for Bild suggested that the majority of Germans (55 percent) still have "great faith" in Volkswagen, with over three-quarters believing that other carmakers are equally guilty of manipulation.[450] Similarly, a poll conducted by the management consultancy Prophet in October 2015 indicated that two-thirds of Germans believe the scandal to be exaggerated and continue to regard Volkswagen as a builder of "excellent cars".[451] A survey by Northwestern University's Kellogg School of Management, Brand Imperatives and Survata said that nearly 50 percent of US consumers had either a positive or very positive impression of Volkswagen, while 7.5 percent had a "very negative" impression.[452] Another US survey by market researcher AutoPacific found that 64 percent of vehicle owners do not trust Volkswagen and only 25 percent of them have a positive view of Volkswagen following the scandal.[453][454]