Everything You Need to Know About the Volkswagen Diesel Scandal

Published on February 21 2017

A few days after presenting an array of new models at the Frankfurt International Auto Show in Germany in September 2015, Volkswagen and the car industry as a whole were shaken by accusations filed by the U.S. Environmental Protection Agency, or EPA.

According to the EPA, Volkswagen, the world leader in sales at the time, intentionally installed on some of its diesel-powered TDI models software that was able to detect when the vehicle in question was undergoing EPA anti-pollution tests in order to distort the pollutant emission data of the engine.

In simpler terms, Volkswagen's tricked TDI engines appeared to meet the EPA's emission standards when they were tested when in fact they were polluting up to 40 times more than was permitted by law. The EPA's allegations focused on the 2.0-liter TDI four-cylinder engine installed on Volkswagen models from 2009 to 2015.

Environmental agencies in several other countries subsequently carried out their own investigations, discovering that Volkswagen had rigged roughly 11 million vehicles sold around the world. Volkswagen admitted on September 20th 2015 that the software in question had been deliberately installed and issued an apology for attempting to infringe environmental laws.


Volkswagen Dieselgate: Significant Financial Consequences

In the days following the EPA’s announcement, Volkswagen shares lost nearly 40 percent of its value after the automaker announced that it had set aside US $ 7.3 billion to cover costs associated with the repairs of its rigged models as well as the fines to which the German manufacturer was exposed. Provisions put aside by Volkswagen climbed to over US $ 18 billion in the months that followed.

Sales of new vehicles also fell across the world, costing Volkswagen its number one sales ranking. Subsequently, Audi and Porsche were also accused of having installed on some of their 3.0-liter V6 TDI engines the same software. Volkswagen CEO Martin Winterkon resigned his position on September 23rd, 2015, less than a week after the dieselgate scandal was revealed.

Nitrogen Oxide at the Heart of the Volkswagen Diesel Scandal

Even though Volkswagen reassured their owners that their TDI vehicles posed no danger to their safety, Volkswagen's image was tarnished almost immediately. The engines that had been tricked polluted a lot more than what was allowed by environmental regulators. More specifically, the TDI engines in question emitted an adverse quantity of nitrogen oxide, a gas which contributes to the formation of acid rain and to the degradation of the ozone layer.

The Volkswagen scandal did not cause any accidents or injuries, but the environmental consequences were real even if the impact remains difficult to evaluate. Nevertheless, the fact that Volkswagen voluntarily attempted to infringe environmental laws certainly hurt the German automaker’s reputation.  

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