Big auto news from today.
Software to fool smog checks. Very disappointed in corporations. This confirms that EV commitment is questionable for these companies. The PR will be very bad.
This is also cheating on people breathing the air. I think some don't get that where you have a "game changer" the rules of the game are about to change. And you may not have two decades for adjustment.
"The notice of violation is part of a broader, more aggressive enforcement effort by federal environmental regulators on the auto industry. Analysts said it was meant to send a clear message to automakers that they will be harshly treated for compromising federal rules.
It follows a November 2014 announcement of the administration’s largest-ever penalty for a violation of the Clean Air Act, in which the government fined the Korean automakers Hyundai Motor and Kia Motors a combined $300 million as part of a settlement for overstating vehicle fuel-economy standards on 1.2 million cars.
“They want to make it clear that they’re going to crack down on cheaters,” said Frank O’Donnell, president of the environmental advocacy group Clean Air Watch. “They’re cheating not only car buyers but the breathing public. They want to lay down the law, enforce the law, and show they’re not going to tolerate cheaters. The laws and regulation are only as good as the enforcement.”
Could be $18 billion in fines plus other lawsuits. What a fiasco.
At such a price tag it is pretty much a fiasco. It may take decades to recover.
And given electric cars' dynamics they may actually never fully recover.
Wow. Well, there goes their EV R&D budget.....
This would seem appropriate:
So much for the myth of the 'clean diesel'... They are lucky I'm not the one handing out the penalties. I'd ban all future sales of their diesel products for five years -- or the length of time they have been cheating -- whichever is longest. Not just a recall of what has been sold, but a buyback of everything currently sitting on dealership lots should be in order too!
VOW3 162.40 -5.40 (3.22%)
VW's R&D budget advantage over Tesla has just been significantly reduced!
As a former owner of a 2009 VW Sportswagen TDI clean diesel, and as one who does not have great faith in many of our government agencies, I find it hard to believe that VW/Audi deliberately did something to circumvent existing regulations for their clean diesels.
They were tested extensively under all conditions in Europe and in the U.S. and nothing like this showed up. When mine underwent state up-the-tailpipe emission standards I had to rev the engine as well as test it at idle and it passed on all accounts. I've driven behind clean diesels on the highway and I can smell someone smoking a cigarette in the cars ahead of me, but never detected any stinky exhaust.
Bottom line: This story does NOT make any sense.
I would NOT be so quick to accept the EPA's charge until we hear all the facts.
:) Waiting for my Model X config call.. long way to go... my number is in the 18XXX.
According to the article, Volkswagen has admitted to installing the defeat device. As a parent of kids who have suffered from asthma, I am outraged. I hope the penalty has the effect of shaming this company into cleaning up its act and becoming a true leader in clean transport.
Hagens Berman Files National Lawsuit Against Volkswagen Group of America for Emissions-Cheating Software, Polluting Cars
ram1901: Dude. They cheated. They got away with it for years. They got caught. They have to pay. It was NOT an accident, malfunction, or defect. They did it on purpose. They were not set up.
It's not about the smell of the exhaust. Most environmentally harmful chemicals are actually odorless. Fragrance is actually added to natural gases such as butane and propane so that they can be detected by human beings when leaking. That doesn't mean they, and similar chemicals, won't kill you dead upon exposure.
Here's another fun discussion of the subject at hand:
@ tbouquet (September 20, 2015)
<< ... Volkswagen has admitted to installing the defeat device. >>
Even if VW-Audi fires all those involved in this fraud, its reputation is bound to suffer permanently, because of the reasonable presumption of willfulness at the highest corporate levels.
Saw the follow up news today... VW CEO admits they did wrong.
Wanted to give them the benefit of the doubt, but I'm man enough to
say you all were right and I was wrong.
Unbelievable that a company the size of VW/Audi would do something so
Ram1901, you are refreshingly non argumentative and open minded. +100!
Engine performance, MPG, low emissions. Pick any two. Unless it's propelled by electric motors, in which you can get all three.
I think they did it to increase sales. Volkswagen is a big, huge company. Worldwide, they sold around 10,000,000 vehicles last year, and the Golf was outsold only by the Toyota Corolla and Ford Focus. But their total US sales during 2014 were barely ahead of Mercedes-Benz, even though the majority of their cars cost a lot less.
Last year, or the year before, the CEO set a goal of making Volkswagen Group AG the biggest manufacturer in the world, surpassing Toyota and General Motors, by 2018. Their push to increase sales in the US was a large part of that strategy, and their diesel vehicle marketing contributed to growth. Without this territory, they are likely to lag behind others for some time.
US criminal probe started.
Honesty is the best policy. Abe Lincoln.
I worked for VW for a decade - this is my perspective.https://www.linkedin.com/pulse/from-ice-nice-pay-price-roger-atkins
Nice article, Roger!
I would like it if this situation leads Volkswagen Group AG to move toward electric drive sooner. But I suspect it will not... Bean counters will want the company to remain conservative, not spend so much on Research & Development... Stick to tried and true technologies... Keep their head down, and stay out of trouble. Anything beyond working on refining hybrid technology would probably be out. The culture at traditional automobile manufacturers tends toward pride (in their historic achievements) and prejudice (against electric drive).
I think the Henry Ford question could go multiple ways... I'd have loved to have had a 100 MPG Corvette Stingray or Acura NSX five years ago... Today though, I look at these wondrous automobiles and can only think... "Why aren't these electric cars?"
this will focus the minds of the driving public squarely on the reality that their exhausts are emitting a toxic cocktail blended with tiny particulates which get deep into our lungs right where we all sit (especially in traffic), walk and live our lives. It is nonsense.
This is the catalyst needed for a shift in public opinion about ICEs versus EVs in my view. Gold for Tesla, if they can start producing more vehicles...
The story will for sure have consequences and not just in the US. In UK half of car sales are diesels. And rules on driving in City centers, e.g. London could get tougher.
Evidently the car's computer would know when it was hooked up to a smog machine and would report passing numbers. When unhooked, it would revert. That is a very high level of cheating, one that must have been authorized at the highest levels. Of course the CEO and his little friends would have established deniability, so probably only middle level people and the hapless techs who wrote the software will be charged.
I see lots of ratting out and plea bargains and how could jail not be in store for some of them.
I will also bet that VW might not be alone. They have vast technological resources and if they could not make diesel work, perhaps others couldn't either.
My basic investment strategy is to buy on disaster. Works pretty well except you have to wait for a suitable disaster. This deserves a look.
And... VOW3 is down again. From 162.40 at the close last week... To a close of 107.30 today.
I read they VW a "defeat box", which I assume is hardware/firmware and software. That is lots of folks spec'ing and building some serious gear. A big team of talented people. Sad nobody had the courage to stand up and say the emperor has no cloths...
But what I wonder is:
Bosch was a partner with VW regarding high tech fuel and ignition systems for decades. Is it possible that Bosch had no idea about the cheating? It seems unlikely to me (purely speculation) that Bosch could be unaware that their systems were putting out considerably higher emissions than were legal, but somehow the cars were still being sold and passing smog tests.
Am I way off base here...or are there more shoes to drop? Will other Bosch partners—BMW, Daimler, etc.—have similar revelations? Will they be implicated directly? I could see VW (and whoever else....) starting to look for partners to throw under the bus.
Remember all the subcontractors and suppliers that BP blamed in the gulf....?
"I will also bet that VW might not be alone. They have vast technological resources and if they could not make diesel work, perhaps others couldn't either."
Others made it work using urea injection device, lower overall performance, and at $4k plus price premiums over comparable VW products.
VW stood alone in offering "clean diesel" without urea injection device, with very good fuel economy, performance, and low emissions at reasonable cost vs gasoline equivalents.
Or so we thought.
Still find it amazing that they were able to hide it for so long. Competitors who couldn't achieve the same performance would have questions and have guesses.
This should raise a question about ethics which is much broader than just VW.
Elon Musk by the way has rightly pointed out that the tests need to be carried out over longer period of time, since the emission control systems massively degrade over time.
They probably all kept it in the family, saying among themselves, "Don't hate the player. Hate the game."
Tonight all the VW, Audi, Seat and Skoda dealers in The Netherlands were invited by Pon (the company that imports cars of those 4 brands in The Netherlands). Later they announced that in total 4,100 cars of these 4 brands will not be delivered. These cars are equiped with a Euro 5 diesel engine (1.6 TDI or 2.0 TDI).
The cars that are equiped with a Euro 6 diesel engine (1.6 TDI or 2.0 TDI) will be delivered to customers according to plan.
Adolph must be embarrassed.
Today VW announced that regarding their MQB-platform their focus will shift towards more EV's, PHEV's and mild Hybrids. And apart from that they will develop a new platform for compact EV's with a range of 250 - 500 km. This new platform will also be used for cars of other brands under the VW umbrella (Audi, Seat, Skoda). And the next VW Pheaton will be all electric. That's good news.
This is the full text:
Volkswagen Brand Board of Management takes strategic decisions
• Accelerated implementation of the efficiency program creates room for
• Streamlined processes leverage further cost-saving potential, including
cuts in fixed costs
• Investments to be reduced by 1 billion euros per year compared with
planning – combined with prioritization of projects for the future
• Product decisions formulated
• New Phaeton will be electric
• New Modular Electric Toolkit planned
The newly-formed Volkswagen Brand Board of Management took further strategic decisions at a special meeting. CEO Dr. Herbert Diess announced major product decisions: a reorientation of the diesel strategy with the most advanced technologies, the development of a standardized electric architecture for passenger cars and light commercial vehicles, and a new approach for the next generation of the Phaeton. Investments are to be reduced by some one billion euros per year, the efficiency program is to be accelerated.
Dr. Herbert Diess underscored: “The Volkswagen brand is repositioning itself for the future. We are becoming more efficient, we are giving our product range and our core technologies a new focus, and we are creating room for forward-looking technologies by speeding up the efficiency program.”
Reorientation of the diesel strategy
It was decided to switch over to installing only diesel drives with SCR and AdBlue technology in Europe and North America as soon as possible. Diesel vehicles will only be equipped with exhaust emissions systems that use the best environmental technology.
Systematic further development of the Modular Transverse Toolkit (MQB)
There will be a major development thrust for the proven MQB standardized technical toolkit, where Volkswagen Passenger Cars holds responsibility for development within the Group network. The focus is on plug-in hybrids with an even greater range, high-volume electric vehicles with a radius of up to 300 kilometers, a 48-volt power supply system (mild hybrid) as well as ever more efficient diesel, petrol and CNG concepts.
A new standard with regard to connectivity and driver assistance systems is to be defined.
MEB electric toolkit
An MEB electric toolkit for future use in compact segment vehicles is to be developed based on the experience gained with existing vehicle architectures. This will be a multi-brand toolkit suitable for both passenger cars and light commercial vehicles and will thus leverage synergies from other electric vehicle projects in the Group. The standardized system will be designed for all body structures and vehicle types, thus allowing particularly emotional vehicle concepts, and will enable an all-electric range of 250 to 500 kilometers.
Phaeton redefined – the future is electric
The Volkswagen Phaeton has embodied the brand’s technological competence and brand ambition from the first generation onward. The future generation of the Phaeton will once again be the flagship for the brand’s profile over the next decade. In light of this, the Board of Management redefined the current project. The specification features a pure electric drive with long-distance capability, connectivity and next-generation assistance systems as well as an emotional design.
Accelerated efficiency program
Dr. Herbert Diess said: “We are very aware that we can only implement these innovations for the future of the Volkswagen brand effectively if we succeed with our efficiency program and in giving our product range a new focus.”
Diess continued: “Together with my Board of Management colleagues and the entire team we are working at top speed on these issues. Time and again, the Volkswagen team has proved it stands united and is fully focused on shaping the future, particularly when times are tough. We have now laid the further foundations for that.”
Hmph. We shall see.
I just heard on the news in Belgium that the Volkswagen Touareg, Porsche Cayenne and Audi A6 Quattro (all with the 3.0 TDI engine) which were build in 2014 and 2015 were also equiped with the notorious sofware programme. In the news they mentioned that this news was released by the EPA.
Here is a link to the news release by the EPA:
"EPA, California Notify Volkswagen of Additional Clean Air Act Violations"
Wonder how the shares of TSLA will react in the next few weeks?
SO FAR, because it appears from reading between the lines that not every single permutation has been tested yet, all the 3.0 V6 TDI engines in:
2014 VW Toureg
2015 Porsche Cayenne
2016 Audit A6 Quattro, A7 Quattro, A8, A8L, and Q5
have a defeat device as well.
Note from the story now being reported that "Environmental regulators have detected three new diesel models, including cars by Audi and Porsche, which have defeat devices installed to cheat on emissions testing."
'Detected' in the 3.0 Litres, not disclosed. If VW Group thought they were in a world of hurt before, it is this detection-not-disclosure in their high margin models across the marques that is seriously going to screw them. Money, prestige, and 'lets make an example of them' and 'they had their chance to come clean, so screw 'em' moments. This might lead to the end of diesels in some markets. The oncoming further shoes to fall is that they will miss their mandated CAFE in a form that means real bank money: using the diesels in the highest price models to improve the CAFE and maintain performance in lieu of other less lucrative measures such as smaller engines and less hp/torque.
Bankruptcy odds exceeding 50%, IMO.
Hitler's baby comes a cropper.