Volkswagen Emission Scandal

Executive summary of Volkswagen Emission Scandal

Volkswagen Group (VW) is a German car manufacturer headquartered in Wolfsburg, Germany. The company has a strong reputation in the automotive industry. However, on September 18, 2015, it was announced by the U.S. Environmental Protection Agency (EPA) that VW had been cheating on American air pollution tests after independent researchers raised questions about emission levels. VW admitted that the company had installed software known as “defeat devices” in the electronic control module of diesel vehicles that were produced between 2008 and 2015. The software analyzed sensor data, including the position of the steering wheel, vehicle speed, the duration of the engine's operation and the barometric pressure. Once the software used these inputs to detect whether emission testing was in progress, it went into a type of test mode which activated the emission control modules. This allowed the vehicle’s emission controls to run at full capacity during the testing, but at a much lower fuel efficiency and performance level than the normal driving operating condition. West Virginia University engineers who were involved in the initial investigation have found that some emissions were 10 to 40 times higher than the EPA legal limits and VW has since admitted the cheat affects 11m cars worldwide. It means far more harmful NOx emissions, including nitrogen dioxide, have been pumped into the air than was thought (on one analysis, between 250,000 to 1m extra tonnes every year). The hidden damage from these VW vehicles could equate to all of the UK’s NOx emissions from all power stations, vehicles, industry and agriculture. NOx emissions can react with other compounds to cause serious respiratory conditions and aggravate heart problems. Long-term exposure to the pollution hastens death. In the weeks since Volkswagen admitted to the US Environmental Protection Agency that his company cheated, the company has lost more than $30 billion in stock-market value. Volkswagen Group CEO Martin Winterkorn resigned, and the head of brand development Heinz-Jakob Neusser, Audi research and development head Ulrich Hackenberg, and Porsche research and development head Wolfgang Hatz were suspended. Volkswagen announced plans in April, 2016 to spend €16.2 billion (US$18.32 billion at April 2016 exchange rates) on rectifying the emissions issues, and planned to refit the affected vehicles as part of a recall campaign. In January 2017, Volkswagen pleaded guilty to criminal charges and signed an agreed Statement of Facts, which drew on the results of an investigation VW had itself commissioned from US lawyers Jones Day. The statement set out how engineers had developed the defeat devices, because diesel models could not pass US emissions tests without them, and deliberately sought to conceal their use. In April 2017, a US federal judge ordered Volkswagen "to pay a $2.8 billion criminal fine for rigging diesel-powered vehicles to cheat on government emissions tests". The "unprecedented" plea deal formalized the punishment which VW had agreed to. Winterkorn was charged with fraud and conspiracy in the USA on 3 May 2018. The scandal raised awareness over the higher levels of pollution emitted by all diesel-powered vehicles from a wide range of car makers, which under real-world driving conditions exceeded legal emission limits.