The German automaker, Volkswagen, was involved in a scandal for fraudulently cheating government regulators regarding the compliance of pollution emission standards. On September 18, 2015, the United States Environmental Protection Agency issued a Notice of Violation of the Clear Air Act against VW and Audi for equipping their 2009-2015 diesel vehicles with software to bypass EPA emissions standards for nitrogen oxides. On November 2, 2015, the EPA issued a second notice of violation to VW including Porsche diesel vehicles as well as vehicles with larger engines than in the first notice. On January 4, 2016, the Department of Justice filed a complaint on behalf of the EPA against VW for alleged violations of the Clean Air Act. VW “admitted that it had deliberately equipped its line of Turbocharged Direct Injection (TDI) Diesel engines with a ‘defeat device’ that was intended to ‘bypass, defeat, or render inoperative elements of a vehicle’s emission control system’ during emissions testing.”
This scandal, also known as “Dieselgate” or “Emissionsgate,” began when U.S. regulators accused the company for illegally programming an estimated 11 million vehicles with engine management software which would falsely show that the vehicles were emitting lower levels of harmful emissions. The defeat device would detect when the vehicles were being tested and turn on the emissions control. According to Bloomberg Business Week, “when the car detects a test—certain steering patterns; speed barometric pressure; only two wheels spinning instead of four—it switches to a cleaner mode called ‘dyno calibration,’ after the testing machines. The cars run cleaner, but they can’t run cleaner without sacrificing fuel efficiency or some of the engine’s power.” The vehicles deceivingly operated within emissions regulations, however, vehicles equipped with these defeat devices were actually emitting more than 40 times the emissions during normal driving conditions. Basically, the software switches to a cleaner emissions mode while testing and switches off after testing. This allowed the vehicle for better engine performance on the road, but also emitted drastic amounts of nitrous oxide into the environment.
In 2014, U.S. and German researchers from the International Council on Clean Transportation (ICCT) performed tests on diesel models of the VW Passat, Jetta, and the BMW X5. Their tests were to confirm that these vehicles were in fact “clean diesel.” The ICCT collaborated with researchers from the West Virginia University (WVU) Center for Alternative Fuels, Engines, and Emissions. Simultaneously, the California Air Resources Board (CARB) was also conducting tests on the vehicles. However, the ICCT/WVU tests were performed with the vehicles under real driving conditions, while the CARB tests were performed in a lab. The results found by ICCT/WVU revealed that the VW Jetta exceeded U.S. emissions by 15 to 35 times the upper limit, the VW Passat surpassed 5 to 20 times the base line, and the BMW X5 passed the test. The vehicles examined by CARB passed all of the emissions tests. The EPA and CARB were notified of the findings and investigations began.
The emissions scandal exposed the unethical and deceptive decisions made by VW, depreciated their reputation around the world, and caused significant financial concerns. As stated by VW’s new CEO, Matthias Muller, the “most urgent task is to win back trust for the Volkswagen Group—by leaving no stone unturned and with maximum transparency.” The company has withdrawn its diesel cars from the market and has made plans for recalling the affected vehicles on the road. Not only does the company have to make repairs to their non-compliant vehicles, but especially to the relationships with their customers and dealers. For the consumers affected by the scandal, VW has created a “’Goodwill Package’ including gift cards, credits for services or products, and a three-year extension of roadside assistance.” They have also reimbursed dealers for holding inventory and issued incentives for the sales of their gasoline-powered vehicles. VW is still paying for their actions today because in September 2017, the company had set side an additional $3 billion in order buy back cars in North America, which means the scandal has reached over $30 billion in total.