What VW's Diesel Emissions Scandal Means for Owners

By now you've probably heard that VW cheated on their diesel emissions. Let's explore why and the wide-reaching ramifications of that decision.

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Ob-NOx-ious behavior

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.

The whole situation is a mess and now the company faces tens of billions of dollars in fines from the US government, states, class-action lawsuits and other countries around the world. Here’s a reverse chronological look at the scandal:

How VW Cheated

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?

A US Emissions History Lesson

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?

Taking the Fall

On September 23, 2015, Martin Winterkorn resigned as CEO of Volkswagen. He said he “accepted responsibilities for the irregularities that [were] found in diesel engines.”

Winterkorn insisted, however, that he didn’t commit any misconduct and knew nothing of the problem. But before you shed a tear for the man, it’s worth noting that he could receive a $67 million dollar severance package.

Let that be a lesson to you, kids: it pays to be oblivious.

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.”

What’s Next for Volkswagen?

Beyond the 450 lawsuits (and counting) and the bruised public image that need mending, there’s the issue of how the hell are they going to fix all these cars? Particularily, how will they implement a fix that isn’t to the detriment of performance or fuel economy? Owners did, after all, pay extra for those features.

VW got off to a good start in Europe, announcing its EA 189 Diesel fix on November 30, 2015. 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 meanwhile…

VW Isn’t Doing Itself Any Favors in the US

As mentioned before, the US has stricter emissions laws. That means any fixes are going to be more complicated, costly and scrutinized. In other words, a “flow straightener” ain’t gonna cut it here.

VW knows this and has already said that US diesels will take years to fix.

They’ve already proposed one solution that was promptly shot down by the EPA and CARB. The plans were said to “contain gaps and lack sufficient detail,” and do “not adequately address overall impacts on vehicle performance, emissions, and safety.”

CEO Matthias Mueller, meanwhile, was telling NPR that VW didn’t lie, they just didn’t understand the question. He later blamed his answer on the stress of the day and asked for a redo on the inteview.

Oh, a redo? I bet some VW owners would like one of those on their car purchase, Mr Mueller.

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 owner, 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.

In Conclusion, Why This is a Big Deal

Despite the obvious terrible deception and its impact on the earth and consumer’s wallets, here are some parting thoughts on why this story is so crazy:

  • Owners loved the blend of power and supposed fuel efficiency that these “clean diesels” were supposed to provide. So much so that they were willing to pay a premium between $1000 and $7000 depending on the car. Will VW be able to recover these loyal customers?
  • VW had already been struggling in the United States as it started making cheaper cars in an effort to become the world’s biggest automaker. And they did, until everyone realized that a cheaply made VW kind of stinks. VW’s Tiguan also failed to capture the crossover-loving nature of the US consumer.
  • VW put a lot of time and money into a ”clean diesel” campaign and this is a massive blow. Not only to VW the brand, but also for the future of diesel cars in the US.
  • Any fix is surely going to come with headaches. As GreenCarReports points out, “if VW is able to develop a fix and get it approved, the performance and fuel efficiency of their cars might fall.”
  • Owners who thought they drove environmentally-friendly cars have been contributing to smog and a wide-range of respiratory problems via high levels of nitrous oxides for years. This could lead to a high level of public outrage.
  • Even with the CEO gone, you’re going to have a hard time convincing people that multiple people in VW’s chain of command weren’t involved in this deceit.

OK, Now What?

Maybe you've experienced this problem. Maybe you're concerned you will soon. Whatever the reason, you can help make sure it gets the attention it deserves.

Below are a handful of steps you can take to make sure this problem gets the attention it needs.

  1. File Your Complaint at CarComplaints.com

    CarComplaints.com is a free site dedicated to uncovering problem trends and informing owners about potential issues with their cars. Major class action law firms use this data when researching cases.

    Add a Complaint

  2. Notify the Center for Auto Safety

    The Center for Auto Safety (CAS) is a pro-consumer organization that researches auto safety issues & often compels the US government to do the right thing through lobbying & lawsuits.

    Notify the CAS

  3. Report a Safety Concern to NHTSA

    The National Highway Traffic Safety Administration (NHTSA) is the US agency with the authority to conduct vehicle defect investigations & force recalls. Their focus is on safety-related issues.

    Report to NHTSA

  4. Spread the Word

    Social media is all the rage these days. And for good reason – it can help spread a message quickly. So get out there and start spreading this page.