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Volkswagen rigged tests on 2.8M cars in Germany, Berlin says

66 points by happyscrappy 11y ago

happyscrappy 11y ago
Does this mean these cars will be recalled or will the environmental laws be weakened to make them road legal?
- prolepunk 11y ago
  As far as we know, all other manufactures complied with environmental regulations. Cars will have to be recalled and it will be a huge hit for VW.
  - alan_cx 11y ago
    I believe that Mercedes and BMW have reasonable suspicion cast on them too.
    - inversionOf 11y ago
      Both of those platforms use Urea systems, as do larger and more expensive VW/Audio vehicles. The issue is purely in the small, inexpensive vehicles. The NOx problems were mostly resolved through the injection of urea into exhaust gases (e.g. AdBlue), dramatically reducing NOx emissions while leaving the efficiency and power unaffected. Urea systems add an extra cost and complexity to the vehicle though (not to mention that you need to top up your urea additive occasionally), and VW seemed to find a loophole that allowed them to make small, inexpensive cars without urea injection. They did this by injecting fuel into the exhaust in the absence of Urea, but to achieve the same effect. But this can gunk up the NOx trap if used endlessly (it is far less precise than urea, obviously), reduces fuel economy, etc, so they built this One Little Trick that only actually does that during identified tests.
      - switch007 11y ago
        Not sure if there are USA/Europe differences with BMW's urea system (likely), but Blue Performance (urea system) is not standard on all BMW diesels in the UK (in 2014 anyway).
      - binarycrusader 11y ago
        I don't understand this assertion. The two VW diesel (US) automobiles I've owned have had an AdBlue system. One was a base model Jetta TDI and the other a Passat TDI (which I now want rid of).
        inversionOf 11y ago
        And the vehicles in question -- the ones that are causing VW these issues -- do not have any urea injection system. That's the whole point. http://ask.cars.com/2012/11/why-do-some-volkswagen-diesels-use-adblue-and-others-do-not.html http://ask.cars.com/2012/11/why-do-some-volkswagen-diesels-u... VW claimed to have a trick that removed the need for it on their smaller, lighter cars. But that trick was a trick that only allowed them to pass EPA tests.
        binarycrusader 11y ago
        Ah, so come to find out, the Jetta TDI 2009-2014 did not have AdBlue (I mistakenly believed the one I owned previously did, a 2010 model). However, VW added the AdBlue system to the 2015 Jetta TDI -- perhaps because they knew that this was a problem: http://www.bimmerfest.com/forums/showthread.php?t=765593 http://www.bimmerfest.com/forums/showthread.php?t=765593 On top of that, even though the Passat has an AdBlue urea system, it's still affected: On the open road, a Volkswagen Jetta TDI blew through the U.S. nitrogen oxide (NOx) emissions limit by 15 to 35 times. A VW Passat TDI (with urea aftertreatment) was 5 to 20 times the maximum. http://www.greencarreports.com/news/1100125_vw-diesel-emissions-recall-what-you-need-to-know-in-10-questions/page-2 http://www.greencarreports.com/news/1100125_vw-diesel-emissi... So yeah, I'm not a happy owner right now.
jeffdavis 11y ago
What would happen if all the affected consumers demanded the full purchase price returned to them and returned their used cars? It seems clear that they would win, because they were fraudulent sales. But that would bankrupt VW, right?
- thrownaway2424 11y ago
  I don't think it's clear that they would win. The cars will be reprogrammed to meet EPA rules, and then they will have less power and use more fuel. The will be worth X on the resale market. Two weeks ago they were worth Y, where X < Y. The damages owners might be entitled to are probably Y-X, not Y.
  - jonknee 11y ago
    They should clearly win because they were sold a fraudulent product. If I sold you a gold watch that didn't turn out to be gold I don't just owe you the difference, I owe you back all the money and I go to jail. The good news for VW is that the cars aren't worthless, so they can buy them back and sell them. For people who want to keep their car there will probably also be a cash offer.
    - thrownaway2424 11y ago
      Yeah, but it's going to be a mess. The person who sold you the car, at the VW dealership, unknowingly misrepresented the product to you. As a consumer under US law you are entitled to certain remedies (such as: the retailer has to take the product back). Then the dealer, who is not, under US law, a "consumer" and is also not identical to Volkswagen itself, has to seek relief from VW for providing it with the bogus merchandise in the first place. But in practice you're not going to be able to walk into the VW dealer and demand your money back, you'd have to take them to court, and there will probably be strong arguments on their side that the case is preempted by some other, much larger suit.
      - jonknee 11y ago
crystalmeph 11y ago
I wonder if this will have an effect on Europe's appetite for diesel cars in general going forward. I know they're much more popular over there than here in the US.
- DanBC 11y ago
  Europe has been trying to move people away from diesel for a while now. The high pollution in some city centres (eg London) and the associated death rates are driving change.
  - switch007 11y ago
    Move away from old diesels (e.g. non turbo/pre common rail/smoking) or new diesels? New diesels are still very much seen as "green" in Europe (well, before the VW scandal).
- adventured 11y ago
  The economist has an interesting article out right now, about how the discussion over diesel cars is almost moot with the rapid rise of the electric car globally over the next few years: http://www.economist.com/news/leaders/21666226-volkswagens-falsification-pollution-tests-opens-door-very-different-car?fsrc=scn/tw/te/pe/ed/dirtysecrets http://www.economist.com/news/leaders/21666226-volkswagens-f...
  - dba7dba 11y ago
    Globally? Electric cars will never reach that much consumers in Asia as it has in US. Very few people in Shanghai/Seoul/Tokyo own private garage to charge cars in over night. And this is why Toyota/Hyundai are stubbornly pushing Hydrogen cars.
    - rm_-rf_slash 11y ago
      Maybe not cars, but perhaps busses will be the preferred electric vehicle in Asia. China's BYD has been building electric busses for a while, and even Los Angeles is buying. To me electric busses seem a no-brainier for municipalities: they have predictable routes so you can schedule around charging times, fuel costs can be beneath what you'd pay for gasoline, and cities looking to reduce their carbon footprint can point to the busses and a demonstrable difference.
rygarfo 11y ago
What about the owners of VW cars that aren't affected by the consumption fraud. I would imagine the value of their cars will, regardless of the diesel engine, decrease with the saturation of people selling their cars or trying to return them. Is it possible for non-affected owners to be compensated as well for loss in market value as a result of the company's actions? Concerned Jetta owner here asking smarter people.
- aw3c2 11y ago
  I hope not, that would be insane. If a car is not worth its price when you buy it, don't buy it.
  - cbhl 11y ago
    IIRC, that's not how car prices work. A new car on a lot is worth far more than a used car with exactly 0 miles driven on it.
    - smnrchrds 11y ago
      I hear a lot that a car loses 10-50% of its value the moment it leaves the dealership, but I am somehow skeptical. If it is true I would love to buy a new used car right outside of, hell, even 50 miles after the dealership at half the price. I think the truth is that it is so rare for a car to be sold at 0 miles that we don't really have a price point on it. It is effectively an illiquid good, so the pricing is just a meaningless number, because no one would sell their car at this fictitious price. Like how no one will bought 37 Signals for 100 billion dollars. [1] [1] https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-...
      - mikeash 11y ago
        It's rare but it's not completely nonexistent. Sometimes the dealership will take possession of a recently sold car, perhaps because they offered some sort of guarantee on it. Once the car has been sold it can't be sold again as "new" even in a case like this, so it will be sold as used with almost no miles on it. Almost nobody is going to buy a car and then immediately turn around and sell it at a huge discount, but that's not the only way cars get sold. Here are a few listings to check out, as proof they exist: http://www.cars.com/vehicledetail/detail/648714782/overview/ http://www.cars.com/vehicledetail/detail/648714782/overview/ http://www.cars.com/vehicledetail/detail/647726128/overview/ http://www.cars.com/vehicledetail/detail/647726128/overview/ http://www.cars.com/vehicledetail/detail/645336026/overview/ http://www.cars.com/vehicledetail/detail/645336026/overview/ I can't be arsed to do the comparison to see how much value they've actually lost compared to new, but the data is there to prove or disprove the claim.
swombat 11y ago
I feel it's worth making the point that everyone talking about penalties is avoiding: Penalties are pointless. Financial penalties applied to a company this size basically just get socialised. Either employees (generally innocent of this) lose their jobs as the company closes factories, or the price of future cars goes up, or even the company goes entirely bust in which case that doesn't actually help anyone at all. The only non-socialised effect of a penalty is to punish shareholders - who are also innocent of this (and arguably even that is socialised, since pension funds probably own large chunks of most car companies!). The people who are guilty are the people who decided to install this software, who installed it, who kept it installed - and the people who were supposed to put in place checks to prevent this sort of fraud from happening, from the CEO on down. The correct response for society, in my opinion, is not to try and apply a punishment to "the company", which is mindless and is only the product of people's decisions, but to make those people accountable. They were guilty of fraud, either directly (very serious) or by lack of diligence (somewhat less serious but still criminal). We have laws about fraud. Apply those laws, put those people in jail, and the next bunch of smartasses who think they can put fraudulent software in cars with this will think twice about it - and probably not do it. In other words, this is a state, criminal matter. Approach this much like any other form of organised crime - investigate, offer reduced penalties for information, and put people who were guilty of this high-level organised crime in jail.
- happyscrappy 11y ago
  There will be a criminal case for fraud and a civil case for customer damages, at least that is how it works in the US. How many countries were defrauded and all their different laws will take quite a while to sort.
- onion2k 11y ago
  Alternatively, nationalise the company with no redress to the shareholders. They lose all their money, the company keeps on running so the jobs are kept (until the business shuts down or is sold at least), and customers aren't left without support. If the penalty for failing to ensure the company you invested in is losing your investment then perhaps shareholders would police their investments better.
harrumph 11y ago
Does anybody know the specific purpose of defeating the pollution control? I never see this addressed. What positive user experience is produced? The car has faster pickup or better gas mileage or something else?
- heygrady 11y ago
  http://www.vox.com/2015/9/21/9365667/volkswagen-clean-diesel-recall-passenger-cars http://www.vox.com/2015/9/21/9365667/volkswagen-clean-diesel...
- pfortuny 11y ago
  First of all, you can add a message to your advertisements, saying "clean". This is great as brand-building. Second: taxes. The buyer pays less taxes (at least in Europe) if the pollution is less than a certain value. And more, I am sure.
happyscrappy 11y ago
This can't really be called a bug because they did it on purpose, but what are the most costly software 'issues' in history? As VW set aside 6 billion for damages I assume this is the worst.
oltta 11y ago
Why does everyone seem to assume this is specific to VW in particular. They nay have been the most egregious but I would be surprised if this was isolated. Just look a those EPA mpg estimates, everybody seems to game the system and "tune" their cars to get highest ratings. Does anybody still hope to get anywhere near the estimate when buying a new car, especially city mpg? I would argue this sort of manipulation is done widely and was pretty well known and accepted but VW must have overdone it. Of course Diesel cars have potential for worse emssisons than gas but I bet this happens across the board, except the Germans are screwed because they are pushing Diesels.
tga_d 11y ago
I see a lot of people posting things to the effect of "It's probably not a huge deal, just a firmware patch." That strikes me as unlikely. If that were the case, then why would VW take this risk in the first place? Clearly, there was some benefit to the car that made engaging in what was clearly illegal behavior seem like a financially sound option to who knows how many people within the company. If applying a firmware patch to fix this doesn't change the value of the car that much, why wouldn't they ship it was that firmware in the first place?
- happyscrappy 11y ago
  >I see a lot of people posting things to the effect of "It's probably not a huge deal, just a firmware patch." Yeah if it were just a firmware patch VW would not have set aside billions to deal with the fallout and had the CEO resign.

66 points by happyscrappy 11y ago

happyscrappy 11y ago

Does this mean these cars will be recalled or will the environmental laws be weakened to make them road legal?

prolepunk 11y ago
As far as we know, all other manufactures complied with environmental regulations. Cars will have to be recalled and it will be a huge hit for VW.
- alan_cx 11y ago
  I believe that Mercedes and BMW have reasonable suspicion cast on them too.
  - inversionOf 11y ago
    Both of those platforms use Urea systems, as do larger and more expensive VW/Audio vehicles. The issue is purely in the small, inexpensive vehicles. The NOx problems were mostly resolved through the injection of urea into exhaust gases (e.g. AdBlue), dramatically reducing NOx emissions while leaving the efficiency and power unaffected. Urea systems add an extra cost and complexity to the vehicle though (not to mention that you need to top up your urea additive occasionally), and VW seemed to find a loophole that allowed them to make small, inexpensive cars without urea injection. They did this by injecting fuel into the exhaust in the absence of Urea, but to achieve the same effect. But this can gunk up the NOx trap if used endlessly (it is far less precise than urea, obviously), reduces fuel economy, etc, so they built this One Little Trick that only actually does that during identified tests.
    - switch007 11y ago
      Not sure if there are USA/Europe differences with BMW's urea system (likely), but Blue Performance (urea system) is not standard on all BMW diesels in the UK (in 2014 anyway).
    - binarycrusader 11y ago
      I don't understand this assertion. The two VW diesel (US) automobiles I've owned have had an AdBlue system. One was a base model Jetta TDI and the other a Passat TDI (which I now want rid of).
      - inversionOf 11y ago
        And the vehicles in question -- the ones that are causing VW these issues -- do not have any urea injection system. That's the whole point. http://ask.cars.com/2012/11/why-do-some-volkswagen-diesels-use-adblue-and-others-do-not.html http://ask.cars.com/2012/11/why-do-some-volkswagen-diesels-u... VW claimed to have a trick that removed the need for it on their smaller, lighter cars. But that trick was a trick that only allowed them to pass EPA tests.
        binarycrusader 11y ago
        Ah, so come to find out, the Jetta TDI 2009-2014 did not have AdBlue (I mistakenly believed the one I owned previously did, a 2010 model). However, VW added the AdBlue system to the 2015 Jetta TDI -- perhaps because they knew that this was a problem: http://www.bimmerfest.com/forums/showthread.php?t=765593 http://www.bimmerfest.com/forums/showthread.php?t=765593 On top of that, even though the Passat has an AdBlue urea system, it's still affected: On the open road, a Volkswagen Jetta TDI blew through the U.S. nitrogen oxide (NOx) emissions limit by 15 to 35 times. A VW Passat TDI (with urea aftertreatment) was 5 to 20 times the maximum. http://www.greencarreports.com/news/1100125_vw-diesel-emissions-recall-what-you-need-to-know-in-10-questions/page-2 http://www.greencarreports.com/news/1100125_vw-diesel-emissi... So yeah, I'm not a happy owner right now.

jeffdavis 11y ago

What would happen if all the affected consumers demanded the full purchase price returned to them and returned their used cars? It seems clear that they would win, because they were fraudulent sales. But that would bankrupt VW, right?

thrownaway2424 11y ago
I don't think it's clear that they would win. The cars will be reprogrammed to meet EPA rules, and then they will have less power and use more fuel. The will be worth X on the resale market. Two weeks ago they were worth Y, where X < Y. The damages owners might be entitled to are probably Y-X, not Y.
- jonknee 11y ago
  They should clearly win because they were sold a fraudulent product. If I sold you a gold watch that didn't turn out to be gold I don't just owe you the difference, I owe you back all the money and I go to jail. The good news for VW is that the cars aren't worthless, so they can buy them back and sell them. For people who want to keep their car there will probably also be a cash offer.
  - thrownaway2424 11y ago
    Yeah, but it's going to be a mess. The person who sold you the car, at the VW dealership, unknowingly misrepresented the product to you. As a consumer under US law you are entitled to certain remedies (such as: the retailer has to take the product back). Then the dealer, who is not, under US law, a "consumer" and is also not identical to Volkswagen itself, has to seek relief from VW for providing it with the bogus merchandise in the first place. But in practice you're not going to be able to walk into the VW dealer and demand your money back, you'd have to take them to court, and there will probably be strong arguments on their side that the case is preempted by some other, much larger suit.
    - jonknee 11y ago

crystalmeph 11y ago

I wonder if this will have an effect on Europe's appetite for diesel cars in general going forward. I know they're much more popular over there than here in the US.

DanBC 11y ago
Europe has been trying to move people away from diesel for a while now. The high pollution in some city centres (eg London) and the associated death rates are driving change.
- switch007 11y ago
  Move away from old diesels (e.g. non turbo/pre common rail/smoking) or new diesels? New diesels are still very much seen as "green" in Europe (well, before the VW scandal).
adventured 11y ago
The economist has an interesting article out right now, about how the discussion over diesel cars is almost moot with the rapid rise of the electric car globally over the next few years: http://www.economist.com/news/leaders/21666226-volkswagens-falsification-pollution-tests-opens-door-very-different-car?fsrc=scn/tw/te/pe/ed/dirtysecrets http://www.economist.com/news/leaders/21666226-volkswagens-f...
- dba7dba 11y ago
  Globally? Electric cars will never reach that much consumers in Asia as it has in US. Very few people in Shanghai/Seoul/Tokyo own private garage to charge cars in over night. And this is why Toyota/Hyundai are stubbornly pushing Hydrogen cars.
  - rm_-rf_slash 11y ago
    Maybe not cars, but perhaps busses will be the preferred electric vehicle in Asia. China's BYD has been building electric busses for a while, and even Los Angeles is buying. To me electric busses seem a no-brainier for municipalities: they have predictable routes so you can schedule around charging times, fuel costs can be beneath what you'd pay for gasoline, and cities looking to reduce their carbon footprint can point to the busses and a demonstrable difference.

rygarfo 11y ago

What about the owners of VW cars that aren't affected by the consumption fraud. I would imagine the value of their cars will, regardless of the diesel engine, decrease with the saturation of people selling their cars or trying to return them. Is it possible for non-affected owners to be compensated as well for loss in market value as a result of the company's actions? Concerned Jetta owner here asking smarter people.

aw3c2 11y ago
I hope not, that would be insane. If a car is not worth its price when you buy it, don't buy it.
- cbhl 11y ago
  IIRC, that's not how car prices work. A new car on a lot is worth far more than a used car with exactly 0 miles driven on it.
  - smnrchrds 11y ago
    I hear a lot that a car loses 10-50% of its value the moment it leaves the dealership, but I am somehow skeptical. If it is true I would love to buy a new used car right outside of, hell, even 50 miles after the dealership at half the price. I think the truth is that it is so rare for a car to be sold at 0 miles that we don't really have a price point on it. It is effectively an illiquid good, so the pricing is just a meaningless number, because no one would sell their car at this fictitious price. Like how no one will bought 37 Signals for 100 billion dollars. [1] [1] https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-...
    - mikeash 11y ago
      It's rare but it's not completely nonexistent. Sometimes the dealership will take possession of a recently sold car, perhaps because they offered some sort of guarantee on it. Once the car has been sold it can't be sold again as "new" even in a case like this, so it will be sold as used with almost no miles on it. Almost nobody is going to buy a car and then immediately turn around and sell it at a huge discount, but that's not the only way cars get sold. Here are a few listings to check out, as proof they exist: http://www.cars.com/vehicledetail/detail/648714782/overview/ http://www.cars.com/vehicledetail/detail/648714782/overview/ http://www.cars.com/vehicledetail/detail/647726128/overview/ http://www.cars.com/vehicledetail/detail/647726128/overview/ http://www.cars.com/vehicledetail/detail/645336026/overview/ http://www.cars.com/vehicledetail/detail/645336026/overview/ I can't be arsed to do the comparison to see how much value they've actually lost compared to new, but the data is there to prove or disprove the claim.

swombat 11y ago

I feel it's worth making the point that everyone talking about penalties is avoiding: Penalties are pointless. Financial penalties applied to a company this size basically just get socialised. Either employees (generally innocent of this) lose their jobs as the company closes factories, or the price of future cars goes up, or even the company goes entirely bust in which case that doesn't actually help anyone at all. The only non-socialised effect of a penalty is to punish shareholders - who are also innocent of this (and arguably even that is socialised, since pension funds probably own large chunks of most car companies!). The people who are guilty are the people who decided to install this software, who installed it, who kept it installed - and the people who were supposed to put in place checks to prevent this sort of fraud from happening, from the CEO on down. The correct response for society, in my opinion, is not to try and apply a punishment to "the company", which is mindless and is only the product of people's decisions, but to make those people accountable. They were guilty of fraud, either directly (very serious) or by lack of diligence (somewhat less serious but still criminal). We have laws about fraud. Apply those laws, put those people in jail, and the next bunch of smartasses who think they can put fraudulent software in cars with this will think twice about it - and probably not do it. In other words, this is a state, criminal matter. Approach this much like any other form of organised crime - investigate, offer reduced penalties for information, and put people who were guilty of this high-level organised crime in jail.

happyscrappy 11y ago
There will be a criminal case for fraud and a civil case for customer damages, at least that is how it works in the US. How many countries were defrauded and all their different laws will take quite a while to sort.
onion2k 11y ago
Alternatively, nationalise the company with no redress to the shareholders. They lose all their money, the company keeps on running so the jobs are kept (until the business shuts down or is sold at least), and customers aren't left without support. If the penalty for failing to ensure the company you invested in is losing your investment then perhaps shareholders would police their investments better.

harrumph 11y ago

Does anybody know the specific purpose of defeating the pollution control? I never see this addressed. What positive user experience is produced? The car has faster pickup or better gas mileage or something else?

heygrady 11y ago
http://www.vox.com/2015/9/21/9365667/volkswagen-clean-diesel-recall-passenger-cars http://www.vox.com/2015/9/21/9365667/volkswagen-clean-diesel...
pfortuny 11y ago
First of all, you can add a message to your advertisements, saying "clean". This is great as brand-building. Second: taxes. The buyer pays less taxes (at least in Europe) if the pollution is less than a certain value. And more, I am sure.

happyscrappy 11y ago

This can't really be called a bug because they did it on purpose, but what are the most costly software 'issues' in history? As VW set aside 6 billion for damages I assume this is the worst.

oltta 11y ago

Why does everyone seem to assume this is specific to VW in particular. They nay have been the most egregious but I would be surprised if this was isolated. Just look a those EPA mpg estimates, everybody seems to game the system and "tune" their cars to get highest ratings. Does anybody still hope to get anywhere near the estimate when buying a new car, especially city mpg? I would argue this sort of manipulation is done widely and was pretty well known and accepted but VW must have overdone it. Of course Diesel cars have potential for worse emssisons than gas but I bet this happens across the board, except the Germans are screwed because they are pushing Diesels.

tga_d 11y ago

I see a lot of people posting things to the effect of "It's probably not a huge deal, just a firmware patch." That strikes me as unlikely. If that were the case, then why would VW take this risk in the first place? Clearly, there was some benefit to the car that made engaging in what was clearly illegal behavior seem like a financially sound option to who knows how many people within the company. If applying a firmware patch to fix this doesn't change the value of the car that much, why wouldn't they ship it was that firmware in the first place?

happyscrappy 11y ago
>I see a lot of people posting things to the effect of "It's probably not a huge deal, just a firmware patch." Yeah if it were just a firmware patch VW would not have set aside billions to deal with the fallout and had the CEO resign.