What was supposed to be a routine test by the International Council on Clean Transportation (ICCT) to portray dominance of emission standards by US over that of the EU, ended up shoving German auto giant Volkswagen in a dark scandal tarnishing its 78-year image, probably for a very long time. The Volkswagen diesel emission scam, also known as 'Dieselgate', has put the car maker on the crosshair of almost all countries that drive its cars. Volkswagen Group's stock price fell 3% immediately after the EPA Notice of Valuation on September 18, 2015 and has plunged a little over 37% since. The scam blew up in faces of officials from the parent and daughter companies both, leading to suspension of three top notch officials and the resignation of then VW CEO, Martin Winterkorn. The scandal has many faces. And only time will tell, how many.
The company had programmed their model year 2009 through 2015 turbocharged direct injection (TDI) diesel engine so that US standards nitrogen oxides (NOx) emissions were met only during laboratory emissions testing.
NOx emissions during driving were up to 40 times higher.
The EPA classified this programming as a defeat device, prohibited by the Clean Air Act.
An estimated eleven million cars worldwide, and 500,000 in the United States, included such programming.
2005: VW intends to purchase Mercedes' BlueTec system for reducing pollution, but other parts of VW reject, prefer to develop one of own
2007: VW suspends sales of current diesel lines awaiting technology to meet new standards. Bosch allegedly warns VW not to use its software illegally
2008: VW announces new clean diesel cars. Some cars are described in Europe as "EU4 emissions standard (EU5 compliant)". Cars with the test-rigging software are sold in the UK
2009: US Tier 2 fully in effect, VW TDI cars go on sale in US
2009-15: VW diesel sales in the US rebound, Clean Diesels win several environmental awards, receive tax breaks
May 2014: ICCT finds discrepancies showing poor on-road emissions. Results presented at public forum and published, getting attention of EPA
2014-15: EPA repeats tests, and contacts VW for explanation of poor real world NOx emissions
Dec 2014: VW orders voluntary recall of TDI cars but California Air Resources Board (CARB) and EPA (Environmental Protection Agency) not satisfied
Sept 18, 2015: Public announcement by EPA of order to recall 2009“2015 cars
Sept 20, 2015: VW admits deception, issues public apology
Sept 21, 2015: First business day after news, VW stock down 20%
Sept 22, 2015: VW says will spend $7.3B to cover costs of scandal; stock declines; stock declines another 17%
Sept 23, 2015: CEO (Martin) Winterkorn resigns
Sept 29, 2015: Volkswagen announces plans to refit up to 11 million vehicles affected by the emissions violations scandal
Oct 8, 2015: VW US CEO Michael Horn testifies before U.S. Congress
2009“2015 Audi A3 2.0 L TDI
2009“2015 VW Beetle 2.0 L TDI
2009“2015 VW Jetta 2.0 L TDI
2012“2015 VW Passat 2.0 L TDI.
2009“2015 VW Golf 2.0 L TDI
https://upload.wikimedia.org/wikipedia/commons/thumb/5/5b/VW_stock_price_after_emissions_violations.png/1280px-VW_stock_price_after_emissions_violations.png
(Tiny representation within graphic)
The recall will affect models fitted with Volkswagen's EA 189 diesel engines, including 5 million at VW brand, 2.1 million at Audi, 1.2 million at Å koda and 1.8 million light commercial vehicles.
In Europe, a total of 8 million vehicles are affected.
Company may simply offer to repair the cars free of charge.
However, turning it (defect) off under normal conditions to improve performance or fuel mileage, the necessary software update might make cars perform less efficiently and impair fuel economy.
China to recall 1,946 imported Tiguan SUVs and four imported Passat B6 sedans to correct the cheat software.
EU's European Investment Bank (EIB) said it is considering recalling VW loans, and announced its own investigation into the matter.
German prosecutors have launched an investigation against former Volkswagen chief executive Martin Winterkorn.
Switzerland has banned sales of Volkswagen diesel cars, marking the most severe step taken so far by a government in reaction to the emissions crisis.
Automotive Research Association of India (ARAI) has been instructed by the Indian government to investigate if vehicles from Volkswagen had circumvented Indian laws and regulations on vehicle emission testing.
Govt recently halted the delivery of Volkwagen's flagship hatchback in country, the Polo until 'further notice'.
"We've totally screwed up," Michael Horn, CEO, Volkswagen USA.
"I don't think you can do something like this hiding in the bushes," Carlos Ghosn, CEO, Renault-Nissan.
"There has never been a scandal in the automotive industry of this size," Jim Holder, the editorial director of Haymarket Automotive, publisher of Autocar and WhatCar magazines.
"What Volkswagen is really showing is that we've reached the limit of what's possible with diesel and gasoline. The time has come to move to a new generation of technology," Elon Musk, CEO, Tesla Motors.
Sources:
Wikipedia
International Business Times, UK
The Guardian
Reuters
Wall Street Journal
BBC
The Globe and the Mail
Financial Post
Fortune
