Diesel Dupe
The Volkswagen Scandal Deepens

Just when you thought it couldn’t get any worse, that the cheating couldn’t get any more brazen or pervasive, well…it does. Last Friday, the EPA accused Volkswagen of using specially designed software to fool emissions tests in nearly 500,000 “clean diesel” vehicles. Today, the company admitted that the software used to dupe regulators may be present in as many as 11 million vehicles. The WSJ reports:

The company [said] that internal investigations have found the engine-management software is also installed in other diesel-powered vehicles in the Volkswagen group but may not have any effect. Volkswagen also owns Porsche, Audi, and Skoda, among other brands.

In other words, an already unprecedented disaster for the German car manufacturer just got a lot bigger. It’s not surprising, then, to see the company’s share prices down more than 20 percent today, after plunging 19 percent yesterday. And the fallout doesn’t stop there. As the NYT reports, the EPA had been pressuring VW for nearly a year to explain the differences between its diesel vehicles’ emissions during testing and their emissions on the road:

Volkswagen executives told environmental regulators for more than a year that discrepancies between pollution tests on its diesel cars and the starkly higher levels out on the road were a technical error, not a deliberate attempt to deceive Washington officials. […]

VW made the admission only when the Environmental Protection Agencytook the extraordinary action of threatening to withhold approval for the company’s 2016 Volkswagen and Audi diesel models, according to letters sent to company officials by the E.P.A. and California regulators.

This issue affects more than American consumers, too. One out of every seven Germans is employed in the auto industry, and Volkswagen is the biggest carmaker of them all. German chancellor Angela Merkel asked for “full transparency” and clarification on the issue, and a hope that “all the facts will be put on the table quickly.” But while we wait for all of those facts—which, given the way things are going, seem to point towards this issue growing larger, not smaller—Europeans are asking for a review of their own industry. From the WSJ again:

The state of Lower Saxony, a major Volkswagen shareholder with 20% of the car maker’s voting stock, said Tuesday that the emissions allegations raised doubts about tailpipe data published by all car makers.

The French government also called for a broader probe, suggesting a European-wide examination of the auto industry. “We need to do it at the European level,” French Finance Minister Michel Sapin said.

It’s still early days yet for this scandal. Stay tuned for more.

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