In what is sure to be one of the largest scandals in the history of automobile manufacturing, Volkswagen is being taken to task for the installation of doctored software that deliberately altered VW emissions data. This altered data allowed Volkswagen’s automobiles to pass stringent emissions inspections before returning the vehicle’s engine operations to their less than legal operating levels.
It is being called the “Diesel Dupe,” and it was very simple. Volkswagen was attempting to boost their presence within the American and European market. However, their vehicles would not pass US emission standards set by the EPA or by their counterparts in European nations.
Vehicles under the Audi and Volkswagen brand were installed with software that was designed to recognize when the vehicle was being tested and downshift the performance of the engine. This resulted in fewer emissions during testing, which allowed the vehicles to be certified and licensed. Once the test was over, the software simply instructed the vehicle to return to normal operations. The result was that when the vehicle’s left the testing bay, they emitted up to 40 times the legal limits of nitrogen oxide pollutants.
The impact on Volkswagen from the VW emissions scandal has been, and will continue to be significant. Presently, the stock has lost over 40% of its value. Numerous executives and those who were aware of the software tinkering have been fired. Adding to this, the company has yet to bear the estimated $6.5 billion cost of the pending recall which is set for January. Further, should the company be fined by the EPA for the fraud, that fine could reach upwards of $18 billion USD.
Could there be more? Legal action from both consumers and shareholders is almost certain to snowball. In California, Volkswagen owners have already filed a class action lawsuit demanding Volkswagen buyback the vehicles they sold in that state. This would cover nearly 67,000 vehicles. Given the fact that Volkswagen has publicly stated they cannot fix all the vehicles in less than a year, it’s possible the company may grant the plaintiff’s requests. If that happens, identical suits in other states are likely to follow.
Internationally, the VW emissions fraud encompasses nearly 11 million vehicles. In the history of vehicle fraud, this is by far the largest. The fines and lawsuits currently being filed around the world are just the beginning of the company’s problems as they’ve lost consumer trust.
