Volkswagen scandal

What is Volkswagen accused of?

Volkswagen released their new generation of diesel cars which they said had very low carbon dioxide emissions. This feature attracted many buyers across the world, and within a few months, this giant German car manufacture had sold over 11 million cars worldwide and over 482,000 cars in the US. However, after multiple tests by the Environmental Protection Agency (EPA), the agency in September revealed the shocking news that they have discovered that VW cars sold in the United States had a software known as “defeat device” in the engine test was able to detect when emission tests were conducted on the car.

Later in November, the German car giant admitted that they had found some irregularities after performing carbon dioxide emission level tests on their new car models saying that this problem may have affected over 800,000 vehicles in Europe. But in December, the company changed its statement saying that a new investigation revealed that the problem only affected 36,000 cars that were produced that year.

An activist of environmental organisation Greenpeace holds a giant letter to display “CO2” around the logo of German car maker Volkswagen ( VW ) at the entrance of the company’s headquarters in Wolfsburg, on November 9, 2015. VW is engulfed in a massive pollution scandal that has so far centred on so-called defeat devices, sophisticated software fitted into diesel engines to skew the results of tests for nitrogen oxide emissions. The embattled auto giant said an internal probe had uncovered “inconsistencies” on carbon emissions as well, affecting not only diesel engines but petrol engines, too.

What is Volkswagen accused of?

Defeat device

Details of how the so-called “defeat device” works are still sketchy but a statement by EPA said that VW diesel engines were fitted with computer software that could detect when carbon dioxide emission tests are conducted. This software modified the engine speed, air pressure, and the position of the steering wheel and could make necessary adjustments to pass the emission test.

When put under controlled lab conditions, these cars appeared to switch into safety mode, in which the engine operated below the normal performance to appear as it has complied with the emission test, a feature that the company widely marketed these cars on. However, as soon as the cars were on the road, the safety mode is deactivated and the car power and performance came back to normal, emitting nitrogen oxide pollutants, up to 40 times, which is way above what is accepted in the US.

Volkswagen defeat device

VW’s response

After this damaging revelation, VW has no choice but to release a statement to explain what happened.

In an official statement read by then VW US boss Martine Winterkorn, he said that the company has completely broken the trust of the public and customers. Mr. Winterkorn later resigned because of this scandal and was replaced by Mathias Muller, a former Porsche manager.

Upon appointment, the new VW US boss did not miss his words. “My immediate job is to win back the trust of their customers and the public at large by ensuring that there is no stone unturned. “He said. VW also formed its own internal task force to look into this issue.

How Volkswagen solved this problem?

Through a statement, the German car manufacturing company has said that it is recalling millions of cars affected by this issue from early next year and it has set aside over £4.8bn to cover the cost. This move has resulted in the giant car company posting its first quarterly loss of €2.5bn, in over 15 years. But this move is unlikely to be the end of the carmaker’s financial troubles. If EPA, which has the power to fine the company up to $37,500 for each car that breached the standards decide to take action, the German car company could end up belling fined about $18 billion. Not to mention that car owners and shareholders could also take legal action against the company.

Other countries such as the UK, South Korea, France, Italy, and Germany have opened investigations to look into this issue. Additionally, politicians worldwide are also questioning the credibility of VW’s emission testing. The recent move to recall about 1.2 million cars in the UK, 2.4 million in Germany, and about 500,000 in the US has shrunk the company’s shares by about a third since the scandal broke.

How Volkswagen solved this problem?

It is just a matter of time before more heads roll

Details of how VW came to fix the cheating devices on their car are still unclear but experts say it is just a matter of time before more heads roll. Like any other car manufacturing company VW has a chain of management command that approved the installation of the cheating devices on the diesel engine and with time, details of how this crucial decision was passed will be known. If company executives and managers knowingly misled other officials, chances are that they will be shown the door.

Are other automakers involved?

The California Air Resources Board is now investigating to see if other car manufacturers are also implicated. Carmakers like Renault –Nissan, BMW, and Ford have released a statement saying that they have not used defeat devices on their cars while other giant car markets have either not commented on the issue or they have simply stated that they have complied with the law.

Over the recent months, pressure has been mounting for the EU to change its testing rules, with experts saying that the current testing rule is outdated. Environmental lobbyists have said that most diesel cars in Europe operate with bad technology than the US. The latest report from the group revealed that at least 90% of diesel cars in Europe have not complied with emission limits when they drive on the road.

A financial research firm Bernstein also agrees with the report released by the environmental lobby group adding that European law needs to be reviewed because they are not strict as those in the United States. “Instead of thinking about taking legal action and fining these car makers, we should focus on changing the test cycle.” He went to say.

Are other automakers involved?
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