What VW’s Diesel Emissions Scandal Means for Owners

Volkswagen has admitted to using a defeat device on its supposedly 'clean diesel' vehicles. The reason? To skirt around US emissions standards. This doesn't sit well with ... well, just about anybody. In fact, the only group who seems really excited by this cheating scandal are the lawyers.

Shortly after the National Highway Traffic Safety Administration (NHTSA) forced Volkswagen to recall 500,000 vehicles in the USA, VW admitted they had used the device on 11 million vehicles worldwide. And an additional 800,000 vehicles were discovered to have poorer fuel economy because of higher than reported CO2 levels.

So how did one of the world’s largest automakers get away with cheating on such a massive scale? And can it ever win back its customers?

Why Did VW Cheat on Emissions?

Back in 2008 when the US implemented tougher emissions standards for cars, companies with diesel engines had to come up with solutions. For all the benefits of diesel engines – like fuel efficiency and power – it has one, big fat negative: they run dirty.

To meet the new regulations, many car companies started adding tanks of a urea-based solution – known as AdBlue – to their vehicles. Thanks the magic of chemistry, the ammonia in AdBlue helps the catalytic converter take nasty gasses like nitrous oxide (NOx) and convert them into nitrogen and water.

Why is this important? NOx – which sounds like a really bad 80’s band name – has been linked to emphysema and bronchitis, as well as being a leading cause of smog. It’s estimated that some urea-based solutions can reduce NOx emissions by 80%.

How VW Setup Their TDIs

VW’s Clean Diesel Campaign (Image via FTC)

On its smaller, 2.0L four-cylinder diesel engines, VW skipped the AdBlue (they do use urea injection on some newer models). Instead they installed a NOx trap which sits between the engine and the exhaust.

But in order for the trap to work, the engine needs to use more fuel. That left critics wondering what magical technology VW had come up with. Well, it turns out they didn’t come up with anything. They were just cheating.

The “Defeat Device”

Software running in the car’s engine control module (ECM) monitors the car’s steering wheel position, speed, duration of engine operation and barometric pressure. This “defeat device” then uses those factors to determine when the car is being driven normally (aka “drive mode”) and when it was being inspected for emissions output (aka “cheat mode”).

While in “cheat mode,” the software activates equipment to reduce the car’s emissions levels. As soon as testing is over, it’s back to dirty driving.

Just how much of a difference are we talking about here? Early reports indicate that emissions levels in “drive mode” are 40 times higher than the EPA limits. That’s a lot of smog.

“Compared with other run-ins between the EPA and automakers, VW’s alleged violation stands out in its brazenness.” — Automotive News

Why VW Cheated

As mentioned above, diesel engines are fuel efficient but tend to run dirty. Automakers have spent millions of dollars researching and testing solutions to reduce emissions while maintaining some of their MPGs.

VW couldn’t find a solution – or didn’t want to try – that they were happy with, so they went a more sinister route. The answer as to why they did it is pretty simple: money. Less money spent researching, and more money earned through sales.

The real questions are:

  • How far up the VW food chain did this cheating decision go?
  • How much in fines and class-action payouts will this ultimately cost the company?
  • Will VW be able to salvage some customer trust when this is all said and done?

Who Figured it Out?

How’s this for karma – the problem was discovered during independent testing that wanted to show how clean VW’s TDIs are.

No, really.

It was all part of a campaign to show consumers that diesel engines are an eco-friendly option. Oops.

“We had no cause for suspicion,” German, U.S. co-lead of the International Council on Clean Transportation, said in an interview. “We thought the vehicles would be clean.”

The Timeline

  • Peter Mock, European managing director of a clean-air group, wanted help testing VW’s diesel engines to show European consumers that diesels can run clean.
  • Mock asked for help from John German, the former environmental chief for Honda’s U.S. operations, who now runs independent testing.
  • German asked for help from West Virginia University’s Center for Alternative Fuels, Engines and Emissions because they had the right equipment for proper testing. Most notably, a portable emission measurement system that can be shoved up an exhaust pipe for real world testing.
  • Testers from German’s group drove monitor-equipped TDIs from San Diego to Seattle (which is an awesome gig by the way, free drive up the Pacific Coast Highway? Yes please!) The 1,300 mile trip through varying conditions would expose any potential scheme in the VWs.
  • The tests revealed that on the open road, the test Jetta exceeded the US nitrogen oxide emissions standard by 15 to 35 times. The test Passat was 5 to 20 times higher than the standard. Another car, the BMW X5, passed the test.
  • An investigation was opened by the EPA in May 2014.
  • While under investigation, VW said it identified the problem and proposed a fix that resulted in the recall of nearly 500,000 US vehicles in December 2014.
  • The California Air Resources Board continued to test VWs after the recall and found that NOx levels were still in violation, despite VW’s “fix.” CARB shared those findings with VW and the EPA on July 8, 2015. At the same time, they threatened to withhold certificates that effectively halt VW diesel sales in California. The EPA agreed and said they wouldn’t approve the cars for sale without an explanation for the “real world” discrepancies.
  • VW allegedly kept giving regulators false explanations, none of which satisfied the EPA or CARB.
  • In September, 2015, while facing the threat of not being able to sell any 2016 TDIs, VW admitted it had installed a “defeat device.”

The “Dieselgate” Fall-Out

Once the news broke of VW’s actions, the story was really just beginning.

Here come the lawsuits.

In November 2015, VW announced an EA 189 Diesel fix in Europe. The solution involves a “flow straightener” in front of the air mass sensor to help “calm swirled air” and increase the sensor’s accuracy. But the fix didn’t meet the US’s stricter emissions laws and VW knows it. “Flow straighteners ain’t gonna cut it here”. By the following month, there were 450 lawsuits (and counting) and a bruised public image that needed mending.

That’s Your Solution?

In January 2016, VW proposed a solution to U.S. regulators. It was promptly shot down because it “contained gaps and sufficient detail,” and does “not adequately address overall impacts on vehicle performance, emissions, and safety.” Ouch, tell us how you really feel. Meanwhile CEO Matthias Mueller decided to make no friends by telling NPR that VW didn’t lie, they just didn’t understand the question. He later blamed his answer on stress. Oh, a redo? I bet some VW owners would like one of those on their car purchase, Mr Mueller.

Executive Roundup

In January 2017, Volkswagen executive Oliver Schmidt was visiting Florida and the feds decided to pay him a visit. They even brought him a shiny pair of bracelets as a gift. Meanwhile VW plead guilty in their diesel case. The automaker agreed to pay $4.3 billion in civil and criminal penalties for their part in selling “clean diesels” that were actually quite dirty.

Former CEO Martin Winterkorn said he “couldn’t remember” when he first learned about the cheating. How convenient. An the compliance chief that VW brought in to help clean up the mess called it quits. She jumped on the Titanic as it was sinking, took one look around, and used a persona lifeboat to get get out of there as soon as possible.

VW officially became felons in the United States by pleading guilty to 3 felonies related to emissions. The judge wants more time to make sure the settlement fits the “serious nature” of the crimes.

In Germany, both VW’s HQ and Audi’s HQ were searched for evidence that executives knew about the emissions scheme for nearly a decade.

Information for VW and Audi Diesel Owners

If you own one of these “clean diesel” cars, here’s a few things to keep in mind.

  • Right now there isn’t one, but a recall is surely on the horizon. VW is blatantly violating federal law so it’s only a matter of time. To make sure you don’t miss any information about the recall, sign up for CarComplaints.com’s free email alerts so we can notify of you of any new information.
  • These cars came with a premium price, and you deserve reimbursement. Girrard Gibbs LLP has started a class-action lawsuit for consumers who bought into VW’s false hype. We will soon have a form where you can contact Girrad Gibbs to take part in the class action.
  • It’s important to note that there is no safety concern so you can keep driving your car until VW comes up with a real solution (unless you suffer from a respiratory disease). You’re just not being as good to the environment as VW led you to believe.
  • Want to trade in your car for a new one? That could get tricky. Right now VW dealers are not allowed to sell any new or used TDIs that have been named in this scandal. That means they likely will not want to take yours. At least not yet, so sit tight.

VW’s “Goodwill Package”

Volkswagen setup a “goodwill package” for certain owners and lessees in the US. The package included:

  • A $500 prepaid Visa gift card that can be used on anything
  • A $500 prepaid card that can be used at VW dealerships.

But, wait — there’s more! If you call now the automaker is also throwing in free 240hour roadside assistance for three years.

Why You Should Read the Fine Print

Lawyers of plaintiffs in over 350 lawsuits have serious questions about the cardholder agreement owners need to sign when accepting the goodwill package. Specifically, will it waive the right to sue or take part of a class action against VW later on?

Volkswagen said it will provide a $500 prepaid Visa gift cars to certain US owners and lessees as part of a “goodwill package

Insultingly Inadequate

On top of the legal remifications, two US senators called the offer “insultingly inadequate.” The senators said if the company really wanted to spread goodwill, they’d offer a buy-back option and do it without taking away the owner’s right to sue.

A Settlement for 2-Liter USA Consumers

On April 21, 2016, Volkswagen reached a broad agreement to with the United States government. The agreement gives nearly half a million VW diesel owners the chance to sell back their cars with “defeat devices.”

The agreement falls short of a borader settlement that will eventually include fines, and additional compensation for owners.

Details and final figures are still being negotiated.

Kelly Blue Book estimated the cost of buying back all affected cars in the USA would cost $7 billion.

U.S. District Judge Charles R. Breyer says owners will receive additional compensation. Exact numbers are unknown, but Judge Breyer calls it “substantial.” The judge had expressed dissatisfaction that the cars were still on the road emitting illegal levels of pollution seven months after the cheating became public.

Volkswagen will offset some of the environmental damage it caused by investing in clean technology. Judge Breyer says the agreement “will fully address any excess emissions and environmental consequences.”

Owners of 480,000 Volkswahens and Audi A3 models with 2-liter engines will have the option of getting their cars fixed for free so they’re compliant with EPA regulations, or sell them back to VW. Either way, it sounds like owners will receive additional compensation.

Owners of about 100,000 3-liter diesel engies, including Audi and Porsche, don’t have an agreement yet.

Volkswagen is far from out of the woods. There’s still official investigations, criminal proceedings in other countries, and a large number of lawsuits to contend with. Breyer is presiding over hundreds of class-action lawsuits filed against Volkswagen, which also faces possible fines and penalties levied by the EPA, the air resources board and other regulators.

(VW is recalling cars in Europe to reprogram the engine software, and in some cases install a plastic part to lower emissions, but those owners will not receive any financial compensation.)

The Department of Justice Said:

“this agreement in principle addresses one important aspect of the department’s pending case against VW, namely what to do about the 2-liter diesel cars on the road and the environmental consequences resulting from their excess emissions.”

Breyer gave the German automaker until June 21 to file the specifics of its plan.

A Settlement for 3-Liter USA Consumers

In early February, 2017, VW released a settlement update for 83,000 Audi, Porsche, and VW vehicles with 3-liter TDI engines.

For VW owners, the settlement focuses on the 2009–2016 Toureg 3-iter TDI. But what year you own makes a big difference in what you’ll receive.

Owners of certain 2009-2012 Touraeg TDIs, have a decision to make. Volkswagen is offering a buyback offer between $26,000 to $58,000 (depending on model year and mileage). Want to keep your vehicle? You can bypass the buyback, wait for VW’s fix, and receive up to $15,380 as compensation for your troubles.

Even previous owners will be eligible for payments ranging from $4,627 to $7,747.

Owners of 2013-2016 Touraeg TDIs will have their vehicles repaired, pending environmental regulator approval. Once the fix is in place, owners and lessees can expect compensation ranging from $8,539 to $17,614.

Current lessees will also be given the option to terminate their lease without any penalty.

The settlement was approved by a federal judge in May 2017.

Story Timeline

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