Information technology—and someone who knows how to manipulate it—is playing the central role in a major automobile manufacturer's apparent efforts to cut corners and save millions of dollars in connection with the emissions systems of its products.
The U.S. Environmental Protection Agency (EPA) alleged Sept. 18 that German vehicle makers Volkswagen and Audi sold 482,000 diesel vehicles in the U.S. that carried a so-called "defeat device"—illegal emissions control software designed to make cars appear to run cleaner in testing situations than they normally do.
On Sept. 21, the plot thickened when The New York Times reported that Volkswagen officials told the EPA for nearly a year that discrepancies between the formal air quality tests on its diesel cars and the much higher pollution levels out on the road were the result of technical errors, not a deliberate attempt to deceive Washington officials.
Under pressure, Volkswagen backtracked earlier this month, admitting that defeat device software was included on VW and Audi vehicles from the 2009-2015 model years with 2.0-liter turbodiesel engines. Specifically, the emissions-cheating software was found in four-cylinder diesel passenger cars that include the Passat, Beetle, Jetta, Golf and Audi A3.
Potentially, the EPA action could amount to penalties of up to $18 billion (£11.6 billion) for Volkswagen.
There was more bad news for VW Sept. 21, although not unexpected: A class-action lawsuit was filed on behalf of California resident and 2012 VW Jetta Sportswagon CleanDiesel owner David Fiol. The complaint seeks class-action status both nationally and in California, unspecified punitive damages and legal fees, among other things. The plaintiff is seeking a jury trial.
What is a Defeat Device?
A defeat device in the automotive world measures, senses, or responds to operating variables (such as engine speed, temperature, intake pressure or any other parameter) for the purpose of activating, modulating, delaying or deactivating the operation of any component or the function of the emission control system.
This particular application is intelligent enough to detect when a car is undergoing EPA emissions testing, and when it does, the emissions computer turns on the vehicle's entire anti-smog control mechanism. The software then switches off the full emissions controls during real-world driving, the EPA said in a statement.
Specifically, when the car is used in normal operations, the software causes the emissions computer in the catalytic converter to deploy less of the catalytic fluid the system uses to mitigate engine emissions. This fluid is very specialized and expensive, costing from $200 to $300 per refill for most drivers. At this time, VW covers this cost for its diesel engines, which is substantial when multiplied by hundreds of thousands of vehicles. Other manufacturers, such as the company's German competitors, Mercedes and BMW, require owners to pay that cost.
"I personally am deeply sorry that we have broken the trust of our customers and the public," Martin Winterkorn, CEO of Volkswagen AG, said Sept. 21 in a statement. "We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case."
After Volkswagen's stock nosedived by 18.6 percent at €132.20 Sept. 21 on the DAX index in Frankfurt, the German government warned that the scandal is besmirching the reputation of the country's entire automotive industry.
"You will understand that we are worried that the justifiably excellent reputation of the German car industry, and in particular that of Volkswagen suffers," Economy Minister Sigmar Gabriel said.
Due to the scandal, two senior VW executives canceled a planned appearance at a Sept. 21 media event in New York. Herbert Diess, chairman of VW's management board, and Heinz-Jakob Neusser, board member in charge of technical development, had planned to attend the event to introduce the latest version of the Passat midsize sedan.
VW Has Been Previously Caught
This isn't the first time Volkswagen has been caught in emissions violations. In June 2005, Volkswagen of America agreed to pay $1.1 million to resolve its failure to promptly notify the EPA and to correct a defective oxygen sensor affecting at least 329,000 of their 1999, 2000 and 2001 Golfs, Jettas, and New Beetles. At the time, it was the largest civil penalty to date for that type of violation.
As part of this settlement, Volkswagen completed a voluntary recall of the affected vehicles at a cost of more than $26 million.