The cost of deception has reached new heights in a settlement Volkswagen reached with the U.S. and California regulators on June 28 to fix or buy back diesel autos that were programmed to fudge standard pollution emission tests.
Original estimates of the cost to VW of building an emission test "defeat device" into its diesel cars was originally about $10 billion, but now that number has grown to $15 billion.
The settlement, which was reached by the automaker, the Justice Department, the Federal Trade Commission and the Environmental Protection Agency, along with the California Air Resources Board, requires the company to buy back or fix all of its 4-cylinder diesel cars made since 2010.
Volkswage's fortunes began to unravel on September 18, 2015 when emissions testers decided to see how the company's highly-touted clean diesel engine would fare in a real-world driving test rather than in the static test normally used for emissions testing. What they found shook the automotive world.
Diesel VW cars emitted up to 40 times more pollutants, mainly oxides of nitrogen, than were allowed under U.S. law during the real-world driving tests. It turns out that VW engineers had programmed the vehicles so that their emissions computer could detect when the car was being tested for emissions and when it was not. To do that, the car's computer checked to see if the front drive wheels of the cars were turning when the others weren't.
Because emissions testing takes place in a static environment where the car wasn't actually moving, the computer then enabled the full emission controls for the duration of the test. The rest of the time, the computer turned them off. This allowed VW to give owners a vehicle that performed well, but which would still pass emissions tests. The problem was, it couldn't do both at the same time.
Volkswagen admitted its error almost immediately. Diesel VW cars were pulled off the market in the United States and current owners learned their cars had diminished in value by nearly half. Meanwhile those cars were emitting pollutants far in excess of what the law allowed.
Ultimately, there are only two solutions. The first is that VW can buy the cars back from those owners and take them off the roads. The second is that the company can fix the cars so that they meet requirements.
Buying back the cars is something that VW can do, but it's expensive. Fixing the cars is possible for newer versions, but may not be possible for older diesel Volkswagen because they lack the pollution-management hardware that the newer vehicles have.
For the newer cars, the fix is fairly straightforward. VW engineers need to update the software to remove the deceptive engine test configuration. This will probably make the cars less fuel efficient and produce less power. They will use more of a special urea solution that cleans up diesel exhaust, but at least they will run. For them, all that's necessary is a software update.