On Friday, the EPA announced it was issuing a notice of violation of the Clean Air Act to the German auto manufacturer Volkswagen for allegedly installing software in some of the diesel cars that circumvented EPA emissions standards for certain air pollutants. Backlash to Volkswagen’s emissions cheating has been swift, with the company’s stock plummeting more than 35 percent amid the potential for billions in fines, massive recalls, and criminal prosecution.
In its notice of violation, the EPA accused Volkswagen of installing software in roughly 482,000 “clean diesel” cars manufactured since 2009, including the Jetta, Beetle, Golf, and some Passat models. But Tuesday, Volkswagen admitted that the problem was much more widespread, affecting as many as 11 million vehicles across the world.
“Let’s be clear about this: Our company was dishonest with the EPA, and the California Air Resources Board and with all of you,” Michael Horn, Volkwagen’s U.S. chief, said Monday night. “And in my German words: We have totally screwed up. We must fix the cars to prevent this from ever happening again and we have to make this right. This kind of behavior is totally inconsistent with our qualities.”
The company announced Tuesday that it was going to set aside about $7.3 billion to cover the cost of fixing the cars as well as any additional costs related to customer lawsuits or fines. Volkswagen’s chief executive Martin Winterkorn promised transparency as the company moves through investigations, saying in a video statement that “everything will be laid on the table, as quickly, thoroughly and transparently as possible.”
But in spite of Volkswagen’s promised speedy transparency, there are some questions that remain about the emissions cheating scandal.
Why did Volkswagen do it?
For years, millions of Volkswagen’s deisel cars contained software that turned their pollution controls on only when the cars were being tested by regulators. This means that, since 2009, Volkswagen’s diesel cars have been emitting pollutants — like nitrous oxide — into the atmosphere at levels much higher than permitted standards. But it wasn’t like Volkswagen didn’t have the time or technology to create these pollution controls — they obviously manufactured the controls well enough to pass emissions standards testing. So why add the software that turned this technology — that was already built and on-board the vehicles — off? What did Volkswagen gain from creating a pollution control, installing it in their vehicles, and then only using it for a fraction of a car’s life?
Volkswagen hasn’t answered this question, and as of publication, hadn’t responded to ThinkProgress’ request for comment, but experts have offered their own speculations. The most likely answer is that the pollution controls probably had a negative impact on the car’s overall durability — they made the engines run hotter, made the cars wear out faster, and caused the car to get worse gas mileage than it would have without the pollution controls.
As Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book, told ThinkProgress, Volkswagen had carved out a niche in the auto market for offering cars with top-notch fuel economy and performance.
“With VW, the whole appeal of their TDI car, speaking not only as an analyst but an owner, is two fold. It’s incredibly fuel efficient — they’re sort of legendary for the kind of fuel economy they are able to bring to the table. And they are able to offer that fuel economy without sacrificing performance,” Gutierrez said. “I think VW was hoping to bring this mix of both fuel economy and performance in a way that forced them to try to circumvent the system.”
But Arvind Thiruvengadam, research assistant professor at West Virginia University’s Center for Alternative Fuels, Engines and Emissions (CAFEE), whose research flagged the problem for the EPA to begin with, wonders if the manufacturer’s reasoning goes beyond fuel efficiency.
“My curiosity in the whole thing is why did Volkswagen take this risky path?” Thiruvengadam told ThinkProgress. “Fuel economy is just the tip of the iceberg.”
Modern diesel engines contain so many components, Thiruvengadam speculated, that it’s possible that Volkswagen saw repeated failures of a particular part in conjunction with the pollution controls, and thought that cheating offered a quick work-around.
“There are so many factors,” Thiruvengadam said. “I’m just curious why they did it.”
Why didn’t the EPA’s own tests catch Volkswagen?
The EPA was the agency that got Volkswagen to confess to cheating — through prolonged and intense investigation and threats to withhold approval for the company’s 2016 diesel models — but the EPA wasn’t the agency that figured out that the cheating was happening in the first place.
The ruse began to unravel for Volkswagen when independent parties looked into how European-manufactured diesel vehicles performed in U.S. driving conditions. The International Council on Clean Transportation, an independent nonprofit organization, partnered with the UWV’s CAFEE to test three vehicles: a BMW, a VW Passat, and a VW Jetta. According to Thiruvengadam, who was directly involved in the research, the point was actually to prove that it was possible for diesel cars to run clean.
“When we started off this study, it wasn’t intended to test these vehicles to see if they were cheating or not,” he said.
CAFEE intended to test the vehicles in real-world driving conditions in California, because the state has such a unique driving pattern due to both terrain and traffic. Before CAFEE began its testing, the California Air Resources Board (CARB) asked to partner with them, offering to run baseline emissions testing of the vehicles in a lab, to give researchers an idea of how the cars were intended to perform.
When researchers at CAFEE compared test results from the CARB lab to their real-world driving tests, they found something surprising: while the BMW performed similarly in the lab and on the road, the Volkswagen cars showed much higher emissions when driven in real-world conditions — 30 to 40 times higher, according to Thiruvengadam.
“This was a very odd pattern,” Thiruvengadam said. “Usually we see differences between real world or the lab, but it’s never the magnitude of 30 to 40 times.”
So why was CAFEE able to catch the problem when the EPA’s own tests didn’t? It comes down to the way that passenger vehicles are tested for emissions. Normally, passenger vehicles are tested in very controlled settings — the chassis of the car is placed on rollers and taken through a simulated set of specific conditions, from driving on a highway to driving in traffic. As the Washington Post points out, the EPA emissions tests are so specific that Volkswagen was able to “teach its cars when to behave more cleanly.”
“When you’re doing standards, which have pass/fail criteria, you need repeatability,” John German, senior fellow for the ICCT, told ThinkProgress. “You design the test so that it’s repeatable.”
What the EPA doesn’t require however, at least for passenger vehicles, is that they be tested on the road — cars are always brought into the lab for testing. Heavy-duty vehicles — like trucks — are required to pass real-world road tests; a requirement that stems from a similar scandal in the late 1990s, when the EPA figured out that some truck manufacturers were programming their diesel trucks to run cleaner in tests than on the road.
But until now, the EPA hasn’t bothered testing light-duty vehicles on the road. The agency’s reasoning, Thiruvengadam wagers, is that laboratory tests are so thorough, and test so many specific conditions, that it hasn’t been necessary. But laboratory conditions are also easier to plan for — and circumvent.
“My guess is that they had not dealt with this specific scenario before, and had placed good faith in the manufacturers to not circumvent their testing procedure, and VW was able to slide under the radar,” Gutierrez said.
By merely taking the cars out for a test drive, CAFEE caught a cheating scandal that the EPA’s testing missed.
How widespread could this be?
It’s unclear how widespread this type of cheating might be, both within Volkswagen and throughout the auto industry. Thiruvengadam said he thinks that, more likely than not, Volkswagen is simply a rouge bad actor that exploited a loophole in the EPA’s emissions testing scheme.
“We tested a BMW and a VW,” he said, “and the BMW did exceptionally well in terms of fuel economy and emissions.”
German echoed Thiruvengadam’s sentiment.
“It’s not the hardware,” German said, explaining that the BMV showed a car can do well in both fuel economy and emissions. “It can be done.”
Gutierrez said that he wouldn’t be surprised if other niche vehciles in oddball segments of the auto industry have used Volkswagen’s tactics to skirt emissions regulations, but he doesn’t think the problem is widespread among mainstream manufacturers.
“There’s such a high degree of parity that if this is relatively widespread, you’d see someone jumping out from the mix offering some sort of revolutionary technology that no one knows about,” he said. “But you don’t see anyone else like VW putting forth these extraordinary claims of performance and fuel economy.”
But some European officials are calling for the investigation into Volkswagen to be widened to include much of the auto industry.
“It’s vital that the public has confidence in vehicle emissions tests and I am calling for the European Commission to investigate this issue as a matter of urgency,” the U.K.’s transportation secretary Patrick McLoughlin said in a statement on Tuesday.
What comes next? (For Volkswagen, and the EPA, and consumers, and the auto industry…)
Volkswagen has already announced that it won’t continue to sell vehicles outfitted with the diesel engines flagged by the EPA. And the company could face fines of up to $37,500 for each vehicle that wasn’t in compliance with the Clean Air Act, which could amount to $18 billion in total. As Brad Plumer points out at Vox, Volkswagen’s total profit last year was about $12 billion, so $18 billion in fines would be huge for the company.
The outing of Volkswagen’s cheating scheme could also impact how vehicles are tested in the United States. Europe is already requiring road tests for passenger vehicles starting in 2017, and something similar could likely happen in the United States as well.
“Certainly beyond the potential financial implications and brand impacts to Volkswagen, for the industry at large I would definitely see a greater emphasis on real world testing for emissions and fuel economy numbers,” Gutierrez said. “More than likely, the EPA will revisit their testing procedure, even just to add a short drive around the parking lot to test real world conditions.”
But in the wake of the Volkswagen scandal — and on the heels of news last year that Hyundai and Kia were overstating their real-world fuel economy — regulators might not be the only ones to approach auto manufacturers with more skepticism.
“I think you’ll find a little more skepticism from consumer action groups or even just owners of cars to really try and test things on their own,” Gutierrez said. “You do get a sense that perhaps some of that trust has been broken and consumers will be less likely to take the claims of manufacturers at face value.”
On Wednesday, the Guardian released an analysis of the total emissions potentially released by Volkswagen as a result of their emissions cheating. The analysis estimated that as much as one million tons of pollution could have come from Volkswagen vehicles with defeat devices, the equivalent of “the UK’s combined emissions for all power stations, vehicles, industry and agriculture.”