Volkswagen Could Face $18 Billion Penalties From U.S. EPA


Thread Starter #1
Joined
Jul 28, 2011
Messages
1,763
Likes
752
Location
Daman
Volkswagen AG faces penalties up to $18 billion after being accused of designing software for diesel cars that deceives regulators measuring toxic emissions, the U.S. Environmental Protection Agency said on Friday.

"Put simply, these cars contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test," Cynthia Giles, an enforcement officer at the EPA, told reporters in a teleconference.

Volkswagen can face civil penalties of $37,500 for each vehicle not in compliance with federal clean air rules. There are 482,000 four-cylinder VW and Audi diesel cars sold since 2008 involved in the allegations. If each car involved is found to be in noncompliance, the penalty could be $18 billion, an EPA official confirmed on the teleconference.

A U.S. Volkswagen spokesman said the company "is cooperating with the investigation; we are unable to comment further at this time."

The feature in question, which the EPA called a "defeat device," masks the true emissions only during testing and therefore when the cars are on the road they emit as much as 40 times the level of pollutants allowed under clean air rules meant to ensure public health is protected, Giles said.

The EPA accused Volkswagen of using software in four-cylinder Volkswagen and Audi diesel cars from model years 2009 to 2015 made to circumvent emissions testing of certain air pollutants.

The EPA has the authority to order VW to recall the vehicles. However, that process could take up to a year, depending on the complexity of the issue, an EPA official said.

The diesel-powered vehicles involved from the 2009 to 2015 model years are the VW Jetta, VW Beetle, VW Golf and the Audi A3, as well as the VW Passat from model years 2014 and 2015.

VW in North America has heavily marketed its vehicles as being "clean diesel."

Volkswagen could face $18 billion penalties from U.S. EPA | Reuters
 
Last edited:
Joined
Nov 24, 2013
Messages
941
Likes
925
Location
Pune
Makes you wonder what else they are cheating the customers like, including in India. Such a huge scale of cheating couldnt have been done without the connivance of management.
 
Joined
Oct 9, 2014
Messages
165
Likes
71
Location
Bangalore
Hot on the heels of last weekend's huge scandal, Volkswagen has admitted they have been using software tricks to cheat during the EPA emissions tests.
According to the Environmental Protection Agency, representatives of Volkswagen have recognized they implemented software code developed specifically to manipulate EPA tests regarding emissions, thus breaching the Clean Air Act.
According to Cynthia Giles, assistant administrator for the EPA's Office of Enforcement and Compliance Assurance, "these violations are very serious, not only because illegal defeat devices result in excess emissions many times the allowable standard, but also because VW was concealing the facts from EPA, the State of California and consumers." She went on to express her disappointment by saying "we expected better from VW."
Amid this massive scandal, Volkswagen CEO Martin Winterkorn issued a public statement: "I personally am deeply sorry that we have broken the trust of our customers and the public." He also said VW has ordered an external investigation and promises the company will do "everything necessary in order to reverse the damage this has caused."
Aside from getting a record fine, Volkswagen also faces a restriction for the 2016MY as EPA will likely block the 2.0 TDI engine by not giving the necessary certification, thus affecting several models including the upcoming facelifted Passat.

Source: http://www.autonews.com/article/20150920/OEM11/309219947/vw-faced-ultimatum-from-epa
 
Joined
Oct 9, 2014
Messages
165
Likes
71
Location
Bangalore
wow. thats really shocking.
will this have any near term impact on vw india ?
In India since the emission norms are not stringent I don't think they would have manipulated with the software but the more worrying factor is has VW compromised on other aspects in gaining a market share in India.
 
Joined
Jul 16, 2015
Messages
58
Likes
9
Location
Bangalore
that may be true. but i was asking about the negative sentiment hurting the brand image and losing sales due to that. do you guys think customers wont buy/cancel bookings? (at least in the near term)
In India since the emission norms are not stringent I don't think they would have manipulated with the software but the more worrying factor is has VW compromised on other aspects in gaining a market share in India.
 
Joined
Jul 16, 2015
Messages
273
Likes
153
Location
Chennai
that may be true. but i was asking about the negative sentiment hurting the brand image and losing sales due to that. do you guys think customers wont buy/cancel bookings? (at least in the near term)
VW customers are not Prius customers. [:)] They are not going to lose sleep over VW cheating the EPA.
 
Joined
Feb 19, 2013
Messages
60
Likes
36
Location
Vijayawada and UK
Looks like the automobile scam of the decade. Further investigations are needed all over the world to see if VW group has resorted to other tricks eg: manipulation of safety and reliability studies etc.
 
Joined
May 1, 2011
Messages
1,765
Likes
342
Location
delhi
I really pulled my friend who bought a Vento and was criticising my maruti dezire, saying quality of European cars etc. [;)]
 
Joined
Oct 9, 2014
Messages
165
Likes
71
Location
Bangalore
After getting caught red handed. Volkswagen's shares have plummeted by more than 20% yesterday, representing the company's highest one-day decrease ever.
Volkswagen risks paying a maximum $18 billion fee after EPA found out they rigged emissions tests for 482,000 cars and this had a huge impact on the company's shares which went down by up to 23% in just one day, thus enabling a decrease in market value of €15.6 billion. The stock market closed at €132.2 euros which represents the lowest value in more than three years. It could have been much worse as during the day the value actually dropped to €125.40, but some of the loss was regained later in the day.
In addition, the company could face lawsuits from environmental groups and shareholders while some recent customers have already expressed their desire to get a refund on their cars equipped with the 2.0 TDI engines as they feel they've been betrayed.
Volkswagen of America is no longer selling cars with that turbodiesel engine in United States and according to industry analysts VAG could suffer a global sales decline in the following period after admitting they cheated during EPA tests. Moreover, the U.S. Justice Department is currently conducting a criminal investigation after EPA discovered cars equipped with the "defeat device" generated 10 to 40 times more pollution above the legal limits, even though the cars passed the official testing. EPA now says they have expanded investigation onto other car makers to find out if this is a more widespread problem.

Source: http://www.autonews.com/article/20150921/OEM11/150929986
 
Joined
Jul 16, 2015
Messages
273
Likes
153
Location
Chennai
I am sure defeat device is being used by other automakers too. EPA should test Daimler AG, BMW AG, Renault SA and PSA Peugeot too.
 
Thread Starter #15
Joined
Jul 28, 2011
Messages
1,763
Likes
752
Location
Daman
Volkswagen shares plunge on emissions scandal; U.S. widens probe.

VW shares fall nearly 20 pct; market cap down 14 bln euros
* U.S. EPA says to widen probe to other carmakers
* U.S. Justice Department starts criminal probe -Bloomberg
* VW initially denied trying to game inspections
* Germany also to investigate carmakers' emissions data (Adds EPA comment on working with DOJ, background about Jetta model that benefited from subsidies.)

one of VW's rule-breaking models, the revamped Jetta TDI, proved very popular when it went on sale in 2009, in part because of Obama administration-approved subsidies designed to spur the sale of "clean diesel" technology.

U.S. authorities said they would widen the probe to other automakers.

German officials, alarmed at the potential damage the scandal could inflict on its car industry, urged Volkswagen to fully clear up the matter and said it would investigate whether emissions data had also been falsified in Europe.

Volkswagen Chief Executive Martin Winterkorn said on Sunday he was "deeply sorry" for the breach of U.S. rules and ordered an investigation.

German rivals Daimler and BMW said the accusations made by U.S. authorities against VW did not apply to them.

UPDATE 7-Volkswagen shares plunge on emissions scandal; U.S. widens probe | Reuters
 

Top Bottom