Volkswagen emissions scandal

Introduction
By Russell Hotten Business reporter, BBC News
10 December 2015

Topic of this research

On 18 September 2015, the United States Environmental Protection Agency (EPA)
issued a notice of violation of the Clean Air Act to German automaker Volkswagen
Group, after it was found that the car maker had intentionally
programmed turbocharged direct injection (TDI) diesel engines to activate
certain emissions controls only during laboratory emissions testing. The
programming caused the vehicles' nitrogen oxide (NOx) output to meet US
standards during regulatory testing, but emit up to 40 times more NOx in real-world
driving. Volkswagen put this programming in about eleven million cars worldwide
and in 500,000 in the United States, during model years 2009 through 2015.

Company Profile
The Volkswagen Group with its headquarters in Wolfsburg is one of the worlds
leading automobile manufacturers and the largest carmaker in Europe. In 2014, the
Group increased the number of vehicles delivered to customers to 10.137 million
(2013: 9.731 million). The share of the world passenger car market amounts to 12.9
percent.
In Western Europe, more than one in four new cars (25.1 percent) is made by the
Volkswagen Group. Group sales revenue in 2014 totaled 202 billion (2013: 197
billion), while profit after tax amounted to 11.1 billion (2013: 9.1 billion).
The Group comprises twelve brands from seven European countries: Volkswagen
Passenger Cars, Audi, SEAT, KODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati,
Volkswagen Commercial Vehicles, Scania and MAN.

What is Volkswagen accused of?

It's been dubbed the "diesel dupe". In September, the Environmental Protection
Agency (EPA) found that many VW cars being sold in America had a "defeat device"
- or software - in diesel engines that could detect when they were being tested,
changing the performance accordingly to improve results. The German car giant has
since admitted cheating emissions tests in the US. VW has had a major push to sell
diesel cars in the US, backed by a huge marketing campaign trumpeting its cars'
low emissions. The EPA's findings cover 482,000 cars in the US only, including the
VW-manufactured Audi A3, and the VW models Jetta, Beetle, Golf and Passat. But
VW has admitted that about 11 million cars worldwide, including eight million in

Europe, are fitted with the so-called "defeat device".The company has also been
accused by the EPA of modifying software on the 3 liter diesel engines fitted to
some Porsche and Audi as well as VW models. VW has denied the claims, which
affect at least 10,000 vehicles. In November, VW said it had found "irregularities" in
tests to measure carbon dioxide emissions levels that could affect about 800,000
cars in Europe - including petrol vehicles. However, in December it said that
following investigations, it had established that this only affected about 36,000 of
the cars it produces each year.

How VW was rumbled

There is a back story here, starting in May 2014 when a study in West Virginia
University found conflicting emissions results on a 2012 Jetta and 2013 Passat
diesel. They alerted the CARB and EPA - leading to the current scandal. And we fear
this one has a long way to run..

Tim Pollard
(Digital editor-in-chief, CAR website gatekeeper, motoring news magnet
Published: 25 November 2015)

Research Aim and Objectives

This scandal raises a few larger questions, though:

Why did Volkswagen cheat in the first place?
Why was it so easy for the company to evade regulators for
years?
Can we say it was a corporate misbehavior?
(Updated by Brad Plumer on September 23, 2015, 11:43 a.m. ET)
Volkswagen hasn't explained exactly why it cheated, but outside analysts have a
good guess. The NOx emission controls likely degraded the cars' performance when

they were switched on the engines ran hotter, wore out more quickly, and got
poorer mileage. Some experts have suggested that the emission controls may have
affected the cars' torque and acceleration, making them less fun to drive. (Indeed,
some individual car owners have been known to disable their cars' emission controls
to boost performance, though this is against the law.)
In other words, Volkswagen wasn't able to produce diesel cars that had the ideal
mix of performance, fuel economy, and low pollution. (Or, at least, it couldn't do this
profitably.) So the company "solved" this trade-off by sacrificing cleanliness and
loosening the pollution controls. And it accomplished this via software designed to
deceive regulators. This was wildly illegal, and Volkswagen got caught.

DUE TO HIGHER NOX EMISSIONS, DIESEL CARS DIDN'T CATCH

ON IN THE US FOR MANY YEARS

Volkswagen And The Failure Of Corporate Social Responsibility

Enrique Dans

The Volkswagen case represents above all an absolute failure in terms

of Corporate Social Responsibility (CSR). The company deliberately set out to
design a means to circumvent emissions controla stratagem known at the
highest levelswith the aim of giving the company an unfair advantage over its
competitors that made it the worlds number one car maker, in large part on the
basis of its supposedly environmentally friendly cars; meanwhile it was poisoning
the planet.
Volkswagen did all it could to hide the fact that its diesel engines were highly
contaminating. How can the head of CSR deny he knew anything about what was
going on? Either that person wasnt doing their job, or they were colluding. The
conclusion can only be that for Volkswagen, CSR is a marketing exercise.
The Volkswagen case shows in stark contrast that we must reinvent CSR. The
people who head these departments must be made responsible for their
companies actions, even if that means going to jail. These people will have to be
very well paid in return for assuming this responsibility, as well as having
budgets that will allow them to develop systems to find out what really goes on in
their companies. The Volkswagen crisis highlights the failings of capitalism, of a

system that has closed its eyes to the reality of the future, and a clearly
unsustainable future.
http://www.forbes.com/sites/enriquedans/2015/09/27/volkswagenand-the-failure-of-corporate-social-responsibility/#23f424046128

Solution
In theory, governments can find ways to make cheating harder. Starting with model
year 2017 vehicles, European regulators are going to start requiring automakers to
test their passenger cars on the road in addition to laboratory tests. That sort of
regime would've made it harder for Volkswagen to pull its little stunt. But it's also
unlikely this is the last time we'll see an automaker come up with a fiendishly clever
way to cheat

Has this harmed the environment?

Emissions have not only been much higher than we thought, but the promise of "clean
diesel" might also be dead.
Analysis conducted by The Guardian suggests that Volkswagen's rigging may have
meant that an extra 1m tonnes of NOx pollution have been emitted each year.
Health experts have claimed that nearly 12,000 lives a year in Britain are being
lost because emissions have not fallen.

Will this put you off buying a Volkswagen vehicle in the future?
Yes, the rigging of emissions is no joke
56

No, I still think it is an excellent car manufacturer

33
Don't know - is the issue really that serious?
http://www.telegraph.co.uk/finance/economics/11880921/Made-inGermany-lies-in-the-gutter-after-Volkswagen-caught-cheating.html

Made in Germany in the gutter, said German newspaper

Bundesdeutsche Zeitung.

Exhaust manipulators does not trust you: investors withdraw VW confidence, the
stock plunges 23 percent into the red. In the US, diesel vehicles are taken off the
market; first cancellation claims are being made.
Frankfurt / Wolfsburg Volkswagen is in the crossfire review: After the Wolfsburg
carmaker tampering with emission levels in the Sunday US has admitted that
shareholders withdraw the company's trust. On Monday, the racing VW Vorzugsaktie in Frankfurt up to 23 percent into the red. That is the largest price drop
in six years. With 128.05 Euros they were as cheap as most recently in July 2012
Design
The current share price fall of the Wolfsburg-based group lost around 19 billion
Euros of market capitalization or else expected the loss of market value weights as
heavy as 1.3 million VW Rabbit in the standard version with a 1.2-liter TSI engine,
which is offered at VW wholesalers Gottfried Schulz for 14,990 Euros. Next the total
market capitalization Commerz bank is just 12.6 billion Euros. "Unbelievable,"
Comment on the dealer. "The exhaust affair should properly draw the brand names
affected.

http://www.handelsblatt.com/finanzen/maerkte/aktien/volkswagenund-die-abgas-affaere-vw-aktie-crasht-um-23prozent/12346742.html

Volkswagen emissions scandal could kill 200 Britons, warns

MIT and Harvard By Sarah Knapton, Science Editor

4:00AM GMT 29 Oct 2015

The Volkswagen emissions scandal could lead to the deaths of 200 Britons if
cars are not recalled quickly, academics have warned.
(Particulate pollution from all sources kills 29,000 Britons a year)

Volkswagens use of defeat software to evade emissions standards will cause the early deaths
of more than 60 people in Britain and could kill up to 200, a study by MIT and Harvard University
has found.
The emissions are, according to the study, likely to cause more than 60 people to die in Britain
up to 20 years prematurely. And that number will rise to 200 if Volkswagen does not actively
enforce the recall.

In addition to the increase in premature deaths, the researchers estimate

that Volkswagen's excess emissions will contribute directly to more than 31 cases of
chronic bronchitis and 34 hospital admissions involving respiratory and cardiac
conditions.
They calculate that individuals will experience more than 120,000 minor restricted
activity days, including work absences, and about 210,000 lower-respiratory symptom
days.
In total, the scandal could cost taxpayers nearly 300 million in healthcare and social
costs.
http://www.telegraph.co.uk/news/health/news/11960254/Volkswage
n-emissions-scandal-could-kill-200-Britons-warns-MIT-andHarvard.html

VW scandal caused nearly 1m tonnes of extra pollution,

analysis shows
Volkswagens rigging of emissions tests for 11m cars means they may be
responsible for nearly 1m tonnes of air pollution every year, roughly the same
as the UKs combined emissions for all power stations, vehicles, industry and
agriculture, a Guardian analysis suggests.

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