After a year of fallout, it’s time to check in with the latest on Volkswagen’s Dieselgate scandal. VW have just pleaded guilty to cheating emissions control tests, and confirmed a $4.3 billion settlement with the US Justice Department as of this Wednesday. Here’s what you need to know.
Unless you’ve been living under a rock, you probably know about the VW scandal that broke out in September of 2015. In case you don’t here’s a primer.
Basically, VW programmed their TDI (turbocharged direct injection) engines to slip through U.S. emissions control testing. When regulators put any Volkswagen Group (that includes models that range from Porsche and Audi to VW) vehicle with the TDI engine into the testing situation, the defeat device would click on and make it appear that the engine met U.S. pollution regulations for NOx or nitrogen oxide emissions. When taken out on the road the diesel engines emit 40% more than the tests measured. The issues affects more than 475,000 U.S. 2.0-liter diesel cars. The impact is tremendous both environmentally and on the consumer level. When owners of the affected vehicles go to re-register and go through SMOG or emissions tests, their cars will now fail and they won't be able to get their registration renewed. It’s caused quite a problem for the VW Group as a whole but it’s also been a massive headache for other automakers, too. A number of automakers have begun shifting away from diesel for fear that consumers will be gun-shy about shelling out money for fuel-efficient vehicles that are now stigmatized.
Basically, skirting emissions is a big bad no-no when it comes to regulatory rules around vehicle regulation. As many as 11 million vehicles worldwide are affected by the Dieselgate scandal and still more could be affected. So far, a number of top-level executives stepped down from Volkswagen, Porsche and Audi. As of today, only one manager in South Korea has been jailed and one German executive was just arrested in Florida, in relation to the scandal. Volkswagen has also agreed to a $14.7 billion dollar settlement for the environmental harm that the scandal has caused. Still customers who own a TDI or diesel vehicle from the Volkswagen Group are faced with a tough choice. VW has offered to buy back affected vehicles at the NADA clean vehicle value at the point it was at prior to the Sept 2015 date. They will also pay owners restitution. For those who want to keep their cars, there will be a recall to bring existing models up to date, though models older than 2015 may require more work and a solution hasn’t yet been made clear.
As a result of the scandal you can no longer buy any affected vehicles from a VW, Audi or Porsche dealership, though you can, and likely will find many used diesel-engined cars from these manufacturers other places. If you do decide to purchase one, be sure you know what you are getting into. The fixes aren’t likely to be elegant and getting your new-to-you diesel car to pass emissions tests in your state could be nearly impossible.
If you want to see a list of the affected vehicles and how much buyback and restitution would be, check out our VW Settlement & Buyback Calculator to get an estimate.
There has been a lot of intrigue around the entire scandal. Everything from suspiciously “lost” cell phones to a shuffling of the board and executives that the Wall Street Journal felt warranted headlines referencing the popular HBO show, Game of Thrones, have appeared.
In fact, a lot of speculation surrounds one executive in particular, Chairman Ferdinand Piech, who left right before the scandal broke, and according to the WSJ, “drove triumphantly through the main gates of Volkswagen’s massive plant here in his bright red Bentley, chauffeured by his wife, Ursula,” just one day after the VW board forced Martin Winterkorn out in the wake of Dieselgate. Piech and his family have a very long and rather, should we say, interesting history with Porsche and Volkswagen. Want to know more? This FT story pretty much gets to the heart of it.
This week, the largest U.S. Auto Show begins in Detroit and current CEO, Matthias Mueller will be absent as a result of the continuing scandal fallout. VW have just pleaded guilty and confirmed its criminal settlement as of today with the Department of Justice, according to the Journal. According to the Reuters story above, Mueller got into hot water at last year’s Detroit Auto Show when he said that VW didn’t lie about emissions. The agreement
could come out as soon as this week was just confirmed and cost VW as much as $4.3 billion, according to Reuters.
Add to this, the fact that now investors are getting in on the VW scandal and have been granted the right to sue for loses as a result of Dieselgate. According to the WSJ investors can seek damages for the drop in share price following the scandal. Owners in Europe are also looking to sue the Volkswagen Group as well, according to the WSJ, and if they are successful the suit could have larger affects around the world. The first suit popped up in Germany and just last week, a group of British owners announced that they are going to seek compensation for the scandal. A few states here in the U.S. have also jumped on the lawsuit bandwagon with attorneys general from a number of states filing suits. States include New York, Massachusetts, and Maryland. If you want to know more about what these lawsuits mean for the states and owners, check out this story over at Consumer Reports.
On the up side, last week the EPA approved fixes to 2015 diesel models, according to Green Car Reports. Volkswagen had proposed these fixes back in October of last year and they have just received approval from the powerful California Resources Board and the EPA. So far though these are the only fixes that have been approved.
VW has a schedule to stick to in order to offer fixes and compensation to owners, too. Vehicles have been broken into four different groups and each group will be fixed on a rolling basis. For more on what group specific vehicles fall into, check out the Consumer Reports story, here.
Volkswagen still has to develop a fix for older models, more heads will roll and more people will go to jail. It’s also still possible that other companies could be affected by the scandal. Because Volkswagen had been able to pull it off for so long, it’s possible that other manufacturers have been doing the same thing to skirt emissions.
If you own a Volkswagen or Audi TDI and want to know whether or not your vehicle is affected, we recently created a free VW Settlement Calculator. Use the calculator to see what your estimated buyback, modification, and restitution amount would be.
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