emissions scandal


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Audi recalls 5000 diesel cars

Audi is recalling around 5000 cars in Europe for a software fix after discovering they emitted too much nitrogen oxide, the polluting gas that Volkswagen hid from U.S. regulators in the 2015 “dieselgate” scandal.

In 2015 Volkswagen was found to have manipulated engine software so that the vehicles would meet the correct nitrogen oxide standards in laboratory testing but not in real-world conditions. 

 The carmaker said yesterday that they had reported the issue to Germany’s road transport authority KBA, which was concerned about the possible illegal manipulation of emission levels.

 
Audi said it would update the software of the 4997 A8 model vehicles with 4.2 litre V8 diesel engines, which were made between September 2013 and August 2017.

The software updates will likely be available in the first quarter of 2018 after winter testing.

“During the testing, it will be ensured that the new software has no disadvantages for customers in terms of fuel consumption or performance.”

 

 

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VW’s emissions scandal bill hits $30bn

Amid arrests, falling share prices and continued uncertainty, Volkswagen’s bill from the ongoing emissions scandal has reached USD$30 Billion.

Reuters reports that on Thursday, German prosecutors arrested Wolfgang Hatz, the first top executive within the group to be detained amid a widening probe into cheating at VW’s Audi brand.

Wolfgang Hatz, arrested on Thursday by German prosecutors for his senior level role in VW’s emissions cheating scandal.

VW’s growing financial woes and Hatz’s arrest were also discussed on Friday at a regular meeting of the carmaker’s supervisory board, one person familiar with the matter said.

VW shares fell as much as 3 per cent on Friday, as traders and analysts reacted to the continuing fallout from the scandal.

VW, Europe’s biggest automaker, admitted in September 2015 that it had used illegal software to cheat U.S. diesel emissions tests, sparking the biggest business crisis in its 80-year history. Before Friday, it had set aside 22.6 billion euros ($26.7 billion) to cover costs such as fines and vehicle refits.

Last year, VW agreed with U.S. authorities to spend up to $15.3 billion to buy back or fix up to 475,000 2.0-litre polluting diesel cars.

On Friday, VW said it was extending the timeline and setting aside an additional 2.5 billion euros (USD$3.0 billion) as hardware. VW says the complications will amount to 5,200 euros per car.

“We have to do more with the hardware,” a VW spokesman said.

In Europe, where only a software update is required for the 8.5 million affected cars, plus a minor component integration for about 3.7 million 1.6-litre vehicles included in that number, fixes are running smoothly, the spokesman added.

The additional provision will be reflected in third-quarter results due on October 27, VW said.

 

 

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German car makers in emissions deal

Emissions have reached toxic levels in many parts of Germany

Politicians and car makers in Germany have agreed to completely overhaul engine software on 5.3 million diesel vehicles in a bid to cut pollution, avoid a ban on diesels and repair the industry’s reputation in Europe.

Justice Minister Heiko Mass told the German newspaper Bild that the agreement was only the first step in an ongoing process, and bans on diesel vehicles in the future would not be ruled out.

“The legal requirements for clean air remain in effect,” he told journalists.

Air pollution has significantly decreased over the past decade, but is still breaching current standards.

In February, the EU Commission found limits for the deadly nitrogen dioxide pollution were exceeded 28 areas of Germany, and was responsible for 10,610 premature German deaths in 2013.

Chancellor Angela Merkel’s government has come under increasing pressure for not doing enough to crack down on vehicle pollution, with Merkel’s close relationship to auto executives heavily criticised.  

However, ministers have been cautious about disrupting the auto industry, which provides 800,000 jobs, and is Germany’s biggest exporter.

“We expect a new culture of responsibility from carmakers,” Environment Minister Barbara Hendricks, from the centre-left Social Democrats, said at a news conference.

“There is much to make good – to the environment, to people in cities, car owners and not least to the security of the car industry in Germany and its hundreds of thousands of jobs.”

The German Association of the Automotive Industry (VDA) said the software updates would cut nitrous oxide emissions by 25-30 per cent for the 5.3 million affected cars.

The software update is expected to cost Volkwagen, Daimler and BMW a combined $800 million.

The popularity of diesel vehicles in the EU’s largest market is falling as a result of the ongoing emissions scandal. German diesel car sales fell 12 per cent in July, and diesel now makes up 40.5 per cent of new car sales, down from 46 per cent in 2016.

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Mercedes to recall entire EU diesel fleet

Daimler chief executive Dieter Zetsche

Virtually Mercedes-Benz diesel vehicle sold in the EU since 2011 will be recalled, Daimler has announced.

The move comes after allegations that the Mercedes-Benz had faked emissions tests were published in a German newspaper last week, and an investigation into Daimler in May.

Daimler refuses to say the announcement is a recall, dubbing it a “service action” in a statement.

Owners of nearly every model produced since 2011 will be asked to return their cars to their local dealer so the engine can be adjusted to reduce emissions.

Altering the 3 million cars on European roads will cost the German car maker $346 million, the Telegraph reports. The recall includes popular C-Class and E-Class Mercedes vehicles.

“The public debate about diesel engines is creating uncertainty,” chief executive of Daimler Dieter Zetsche said in a statement.

“We have therefore decided on additional measures to reassure drivers of diesel cars and to strengthen confidence in diesel technology.”’

The software update is expected to take approximately an hour, and will extend emissions controls on the engine so it will activate under wider conditions.

Zetsche said the action wasn’t the end of the diesel engine for Mercedes, and that the company is “convinced that diesel engines will continue to be a fixed element of the drive-system mix, not least due to their low CO2 emissions.”

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Mercedes-Benz under investigation

A German newspaper has reported that Mercedes-Benz is under investigation for possibly selling over a million cars with excess emissions in Europe and the US.

The Sueddeutsche Zeitung, citing a search warrant issued by a court in Stuttgart, Germanny, says prosecutors were examining the possible use of illegal software to manipulate emissions test results in Mercedes-Benz vehicles between 2008 and 2016.

Both the prosecutor and Daimer, Mercedes’ parent company, declined to comment to Reuters regarding the report, but Daimler said the firm was fully cooperating with authorities and did not believe cars will lose certification.

“We take comfort from the fact that this is a European issue, not a US investigation. We also do not believe these Merc cars will lose their certification,” analysts from Bernstein Research told Reuters. “Our judgement is that Merc will be asked to recall these cars for a ‘software fix.’”

Bernstein estimated that if Daimler faced penalties at a similar per-car level to Volkswagen, the total fine would amount to $275 million to $400 million.

Stuttgart prosecutors conducted raids on 11 different sites in Germany as part of a wider probe into possible excess diesel emission from Daimler, and two employees are under investigation.

Mercedes-Benz has dropped plans to seek US approval to sell its 2017 diesel models, and investigations from the US Justice Department and Environmental Protection Agency (EPA) are ongoing.

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VW faces legal action

A group representing 180,000 car owners in Europe is seeking a full refund of Volkswagen vehicles affected by the scandal at an estimated cost of $6.9 billion, the Financial Times has reported.

Patrick Haas of AKD, a law firm based in Rotterdam, is serving as legal counsel for the Stiching Volkswagen Car Claim Foundation, which was established in October 2015.

Despite the successful case against Volkswagen in the US, the German car maker has denied breaking any laws in Europe and has refused to offer buyers compensation.

Experts have said there is a slim chance of successful litigation after Germany’s transport ministry approved a recall last December to ensure all affected cars would meet legal requirements and emissions standards.

Haas, however, said this latest recall does not fix the emission issue, and there is “still a big gap between lab conditions and real road conditions.” The group hopes to bring the case to court this spring.

Another legal representative, Damon Parker from Harcus Sinclair in the UK, told the Financial Times that “VW is forcing everyone to launch claims in their own jurisdictions,” and the group was attempting to bypass this by creating a “pan-European alliance.”

“We do not see a legal basis for customer actions,” Volkswagen said in a statement. “All vehicles affected are and have been technically safe and roadworthy. They can be driven on roads without any limitations and can be sold without loss in residual value. The required authorisations remain valid.”

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Audi accused of more emissions cheating

The German government has accusing Audi of cheating emissions tests with its top-end models. It’s the first time Audi has been accused of emissions cheating in its home country.

The German transport ministry has asked Audi to recall around 24,000 A7 and A8 models built between 2009 and 2013, around half of which were sold in Germany, Reuters reports.

A ministry spokesman told Reuters that VW CEO Matthias Mueller was summoned to the transport ministry, but didn’t elaborate.

The ministry said that recalled Audi models which were supposedly Euro-5 emission standards but in fact emitted twice the legal limit of nitrogen oxide when the steering wheel is turned more than 15 degrees.

The ministry has also issued a deadline of June 12 for Audi to come up with a plan to refit the affected cars. Audi issued a recall for the affected cars on Thursday, and said software updates will start in July.

An Audi source told Reuters the discrepancy in emissions is due to a faulty interaction between transmission and engine control units, and a proposal for a fix has already been submitted to the KBA.

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Researchers find VW ‘defeat device’

A team of researchers from around the world have found the code buried deep in onboard software which enabled Volkswagen to circumvent American and European emissions tests for over six years before allegations of cheating surfaced in 2015.

The researchers, led by computer scientist Krill Levchenko from the University of California San Diego, obtained copies of Volkswagen onboard software from the company’s own maintenance website and from various forums online run by car enthusiasts, said the UC San Diego News Centre.

“We found evidence of the fraud right there in public view,” Levchenko said. “We found the system and how it was used.”

The code allowed the car’s onboard computer to determine the vehicle was undergoing an emissions test, and then activate emission-curbing systems to lower the pollutants emitted.

When a car is tested for emissions levels, it is placed on a chassis equipped with a dynamometer, which measures the engine’s power output. The test then begins a specific speed profile designed to imitate real-world urban driving with frequent stops.

Because the conditions for this test are standard across all stations, and publicly available, manufacturers are able to anticipate the exact conditions of the test. The code found in Volkswagen vehicles checks the speed, distance, and wheel position, and if it matches the conditions of the emissions test, the code will allow the onboard computer to activate the emissions-curbing system.

When the test was over, the onboard computer then deactivated these systems. Cars emitted up to 40 times the amount of nitrogen oxide allowed under US regulations once the emissions-curbing software was deactivated.

 “The Volkswagen defeat device is arguably the most complex in automotive history,” Levchenko said.

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US sues Fiat Chrysler for emissions cheating

The US Justice Department has filed a lawsuit against Fiat Chrysler, accusing the car maker of illegally using software to bypass emissions testing regulations in over 104,000 diesel vehicles, namely Jeep Grand Cherokee and Dodge RAM trucks, sold since 2014.

Fiat Chrysler denies any wrongdoing and said on Tuesday it was disappointed that the US had filed the suit. According to Reuters, a spokesperson said the car maker would defend all allegations “it engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

The lawsuit alleges Fiat Chrysler installed ‘defeat devices’ between 2014 and 2016, which led to illegal levels of nitrogen oxide, and asks the district court to order a fix on all affected vehicles and a sales ban.

The civil case could result in a fine of up to $64,200 for each vehicle sold after November 2015, when news of the emissions scandal first broke worldwide, and $52,300 for those sold prior to this date – a total of over $6.5 billion, according to Reuters.

It’s not the first time Fiat Chrysler has found itself int he middle of an emissions scandal. In January, the EPA and the state of California filed a separate lawsuit against the car maker alleging the use of defeat devices. German transport minister Alexander Dobrindt also called for the affected vehicles to be pulled from European markets.

Both vehicles at the centre of the lawsuit are available for sale in New Zealand through certain dealers. New Zealand has no emissions standard testing or requirements for diesel vehicles, and the government currently has no plans to introduce any in the future.

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Judge OK’s 3-litre VW settlement

A federal judge has granted final approval on an agreement for embattled car maker Volkswagen to fix and buy back over 80,000 3.0-litre diesels in the United States, at an estimated cost of over $1.7 billion.

Owners of affected vehicles will be compensated between $10,000 and $23,000 if they chose to opt for fixes. Volkswagen could be forced to pay up to $5.8 billion if the fixes for 3.0-litre diesels are not approved by American regulators

The ruling is one of the final acts in the long-running emissions scandal, which began in October 2015 when it was revealed Volkswagen had fitted diesel vehicles with so-called ‘defeat devices’ to cheat emissions tests.

A separate settlement to fix or buy back 475,000 polluting 2.0-litre diesel vehicles was approved last spring.

Volkswagen spokeswoman Jeannine Ginivan told Reuters the settlement “marks an important milestone for Volkswagen and means that a resolution is available to all of our customers.”

In total, Volkswagen has agreed to spend $36.33 billion on various settlements. Last month, the car maker was sentenced to three years probation after pleading guilty to criminal charges, and agreed to broad reforms and independent oversight.

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VW sentenced to probation, oversight

A Detroit federal judge sentence Volkswagen AG to three years’ probation and oversight over the weekend as part of the $6.1 billion settlement first announced in January.

An independent monitor will oversee Volkswagen’s American operations in one of the last major legal judgements since the scandal broke in September 2015.

“This is a case of deliberate and massive fraud,” US district judge Sean Cox said in his ruling. Cox also approved the $4 billion criminal fine as part of the settlement.

Volkswagen has agreed to spend up to $35 billion in the US to settle buyback and repair claims from car owners, states, dealers and environmental regulators.

General counsel Manfred Doess said Volkwagen “deeply regrets the behaviour that gave rise to this case. Plain and simple, it was wrong.”

The US Justice Department has also selected the car maker’s independent monitor. Former deputy US attorney general Larry Thompson was announced over the weekend.

Seven current and former Volkswagen executives have been charged in relation to the emissions scandal, with one executive awaiting trial in custody and another pleading guilty and agreeing to cooperate with authorities.

“We have worked tirelessly to address the misconduct that took place within our company and make things right for our affected customers,” The car maker said in a statement following the sentencing.

“Volkswagen today is not the same company it was 19 months ago.”

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