emissions scandal


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VW settles with 10 more US states

German car maker Volkswagen announced in a statement that it has agreed to settle environmental claims from 10 US states over its illegal excess diesel emissions for $224 million in an effort to move past the ongoing scandal.

The settlement covers mainly eastern states, including New York, Connecticut, Massachusetts and Pennsylvania, and also covers some consumer claims.

“The agreement avoids further prolonged and costly litigation as Volkswagen continues to work to earn back the trust of its customers, regulators and the public,” The car maker said in its statement on the matter.

This brings the total bill for VW up to $35.75 billion in the United States alone, resolving claims and buying back affected vehicles from owners, states, dealerships and environmental regulators.

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London, Paris to launch new emissions system

Paris Mayor Anne Hidalgo and London Mayor Sadiq Khan jointly announced yesterday that they are working together to creating a vehicle rating system which would score new cars based on real-world emissions and their impact on air quality.

Current schemes, such as the EU standards, only regulate some noxious emissions and require vehicles to meet laboratory condition standards, despite the fact that actual on-road emissions have been proven to exceed this limit by up to 15 times.

Recent scandals have destroyed public confidence in the current emissions legislation, and a study conducted by the German transport ministry in 2016 showed that some diesel cars that meet the highest EU environmental standards, rated Euro 6, actually release more nitrogen oxide and nitrogen dioxide than a modern heavy-duty truck.

The new scheme allocates each model of car with a score based on the air pollutants they release during real-world, on-road conditions, which will be available to the public through dedicated websites.

Paris and London have committed to launch this online data by the end of 2017.

 “For too long, some vehicle manufacturers have been able to hide behind inconsistent regulation and consumer uncertainty about the damage their cars are causing,” said Hidalgo at the meeting.

“This announcement is a wake-up call to car companies that they need to act now.”

 “My scheme will put an end to the smoke and mirrors that have been employed in official emissions tests. It will provide Londoners with an honest, accurate and independent evaluation of the emissions of most new cars and vans on our roads and on the showroom forecourt,” said Khan.

“By having ‘on the road’ testing, I believe we will help Londoners make an informed choice and incentivise manufacturers to build cleaner vehicles sooner.”

“The toxicity of the air in London and many other big cities is an outrage, and schemes of the type we are introducing in London and Paris have the potential to make a massive difference to the quality of the air we all breathe.”

Several other cities, including Seoul, Madrid, Mexico City, Milan, Moscow, Oslo and Tokyo have all committed to work to develop a relevant local scoring system and make it available to the public.

“Tackling vehicle emissions is a priority if you are to tackle air pollution in your city,” said Seoul mayor Wonsoon Park. “As cities made significant contributions toward the adoption of the Paris Agreement, the concerted effort shown by cities today to tackle air pollution will make air cleaner for our citizens to breathe.”

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France to investigate Fiat Chrysler

French prosecutors have confirmed a formal investigation into Fiat Chrysler has been opened over allegations the car maker cheated in diesel emissions tests.

“I can confirm that a judicial investigation has been opened into aggravated cheating,” a judicial source told Reuters.

The investigation was opened on March 15 on advice from the finance ministry’s consumer affairs and anti-fraud body, DGCCRF.

A spokesman for Fiat told Reuters the company took note of the investigation and told Reuters its diesel vehicles fully comply with emission regulations, as confirmed by the Italian Transport Ministry.

The investigation comes as several European countries found on-road nitrogen oxide emissions more than 10 times above regulatory limits for some GM, Renault and Fiat Chrysler diesel vehicles after launching their own tests. Widespread use of defeat devices was also noted.

The French test programme launched by environment minister Segolene Royal has led to Volkswagen, Renault Fiat Chrysler and PSA Group all being referred on to prosecutors.

Fiat Chrysler vehicles were among those that recorded the highest toxic nitrogen emissions.

In the UK, the government is testing the emissions of Fiat Chrysler’s Jeep Grand Cherokee, according to the BBC.

The UK Department for Transport has also asked for details of an investigation the United States Environmental Protection Agency conducted into Fiat Chrysler’s diesel emissions software.

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France closes Opel investigation

French regulator DGCCRF closed its investigation into diesel emissions by Opel cars overnight and said it would take no further action against General Motors.

The probe “did not bring to light any evidence of fraud,” the government bureau said in a statement.

Questions around Opel (and its British counterpart Vauxhall) have been swirling since the Volkswagen scandal first broke in September 2015. In October 2015, German environmental group Deutsche Umwelthilfe claimed that testing showed the 1.6-litre diesel Opel Zafira exceeded 2014 EU emissions thresholds under certain circumstances.

The following May, a joint investigation between Der Spiegel and German news programme monitor suggested a number of Zafira and Insignia diesel models to contain devices that would deactivate filtration systems.

The German transport ministry demanded answers from General Motors and Opel, who vehemently denied any wrongdoing. In response, Opel published a lengthy report explaining how and why the software uncovered by the investigation was technically legal under EU emissions regulations.

Last month, Opel was sold to PSA Group, which includes the Citroen and Peugeot marques, as GM sought to extricate itself from its struggling European holdings.

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VW executive remains in prison over emissions case

A Detroit judge has refused to set a bond and release a German Volkswagen executive who was arrested while on holiday in Florida last year.

Oliver Schmidt’s lawyers attempted to persuade the judge to set a bond, saying Schmidt would stay in the Detroit area under electronic monitoring and return for subsequent court hearings. Prosecutors, however, argued that he no ties to the U.S. and would be out of jurisdiction if he fled to his home country of Germany.  

U.S. district judge Sean Cox said it was a “very, very serious case.” His decision means Schmidt will remain behind bars while the case moves through the district court.

Schmidt’s trial is due to begin on January 16 next year. He is charged with 11 felony counts and could face up to 169 years in prison, according to Reuters.

Schmidt is one of seven VW employees charged in a long-running scheme to cheat emissions standards in the U.S. by installing illegal software on diesel vehicles. As Germany doesn’t extradite its citizens, the other five German executives facing charges may never see the courtroom.

In Detroit, Schmidt pleaded not guilty to charges of conspiracy and fraud. Until the scandal broke, he was the manager of VW’s environment and engineering office. He is accused of lying to U.S regulars by saying technical issues, not illegal software, were behind the discrepancies between diesel emissions in road and lab tests.

Last week, VW pleaded guilty to carious charges and agreed to pay back $6.2 billion in civil and criminal penalties. Total expenses for the embattled auto company are expected to exceed $30 billion.

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Police raid Audi homes, factories

German prosecutors searched two of Audi’s biggest factories and other properties on Wednesday with the ongoing emissions scandal.

The raids are the first at Audi since the scandal involving parent company Volkswagen first broke 18 months ago.

Prosecutors focused on who was involved with the use of illicit software found in 80,000 VW, Audi and Porsche cars that contained 3.0-litre engines and were found to have breached U.S. emissions regulations.

“With these search orders, we aim to clarify in particular who was involved in deploying the technology concerned and in the provision of false information to third parties,” the Munich prosecutor’s office said in a statement on Wednesday.

It said the raids involved prosecutors from several jurisdictions and state police from Bavaria, Baden-Wuerttemberg and Lower Saxony. VW’s Wolfsburg headquarters were searched, along with Audi’s Ingolstadt and Neckarsulm factories and six other unspecified sites.

Reuters reports that some 70 law enforcement officers also searched offices and private homes as part of the operation, although Audi CEO Rupert Stadler’s house was not among them.

The police raid occurred as Stadler was presenting Audi’s 2016 earnings. “I have all along supported efforts to clear up the diesel issue at Audi,” he told journalists, admitting recovery from the scandal would still take some time.

Audi reported a 37 drop in operating profit to $4.7 billion for 2016, with a sales return of 5.1 per cent, compared to 8.3 per cent a year earlier.

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VW pleads guilty in US

Volkswagen has pleaded guilty over the weekend to fraud, obstruction of justice and falsifying documents as part of its $6.2 settlement with the United States Justice Department, which was first reached in January, over the diesel emissions scandal.

VW’s general counsel, Manfred Doess, made the plea on the car maker’s behalf. The plea was accepted by U.S district judge Sean Cox, who has set a sentencing date for April 21.

Shares rose 0.3 per cent at the news in Germany to 143.70 euros.

A company spokesman told Reuters it was the first time the company has pleaded guilty to criminal conduct in any court in the world. The guilty plea follows ongoing investigations which began in 2015, when news emerged that Volkswagen had intentionally cheated on emissions tests for at least six years.

In total, VW has agreed to spend over $36 billion on settlements between owners, states, dealerships and environmental regulators in the U.S. and has offered to buy back approximately 500,000 polluting vehicles.

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Merkel testifies in VW inquiry

German Chancellor Angela Merkel has appeared before a parliamentary committee of inquiry investigating the ongoing Volkswagen emissions scandal.

The inquiry was established to investigate whether German authorities were aware of VW’s emissions cheating before the United States. Angela Merkel is the last witness to testify. German opposition parties wanted the inquiry to investigate the government’s response to the scandal, which they felt had been too lax.

Merkel told the committee she first learned of the diesel emissions scandal through the media. “I only found out through media reports,” she said.

Merkel said she found out about the accusations against Volkswagen on September 19 2015, and was informed by the transport minister, Alexander Dobrindt, on September 21. Her first contact with former VW CEO Martin Winterkorn regarding the issue came via a telephone call “probably on the 22 September,” according to Reuters.

The long-standing relationship between Merkel and Winterkorn has been a point of interest throughout the emissions scandal.

When asked what she found out from the VW chief, Merkel said, “nothing that I didn’t already know based on the information from the transport minister and the media.” She said it was unfortunate that VW had misled U.S. authorities.

Merkel said she felt Dobrint had kept her well informed on the issue and quickly set up an investigation committee, and she had no impression that German authorities responsible had been negligent or incompetent during the scandal.

The emissions scandal broke on September 18, 2015, after U.S authorities ordered a recall of VW diesel vehicles. Merkel said she did not know why the emissions cheating had not been discovered in Germany. “I don’t have any explanation for that,” she told the committee.

A long-time defender of diesel vehicles, Merkel argued against excessive regulation of the industry, which employs 800,000 people in Germany. “We should have regulation that is ambitious, but not to such an extent that cars can no longer be produced,” she said.

The inquiry has yet to uncover clear evidence of improper misconduct by Angela Merkel or the German government.

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ACCC files legal action against Audi

The Australian Competition & Consumer Commission (ACCC) has filed further legal action against VW subsidiary Audi, alleging the German car maker used a defeat device in its diesel vehicles to evade emissions regulations between 2011 and 2015.

The latest filing is a continuation of proceedings the consumer watchdog first launched against VW on September 1 last year.

The ACCC claims Audi “engaged in misleading conduct by representing that the vehicles complied with all applicable regulatory requirements for road vehicles in Australia when, because of the defeat software, that was not the case.”

“Audi Australia marketed the vehicles in Australia as being environmentally friendly, producing low emissions and complying with stringent European standards when this was not the case under normal driving conditions,” the report continued.

“Consumers expect that there is some relationship between the performance of the car as set out in the sales brochure and their day to day on-road use,” ACCC Chairman Rod Sims said.

“We allege that the installation of software which allows the vehicle to meet testing standards but then causes the vehicles to operate differently on the road… breach the Australian consumer law.”

While Skoda-branded vehicles are also affected by the VW emissions scandal, the ACCC has decided against further action against VW, noting the lower volume of Australian sales and continuing class actions.

Audi Australia has supplied more than 12,000 affected vehicles to Australian consumers, according to the ACCC.

In December 2016, VW and Audi Australia announced a recall and software update for the affected vehicles designed to repair diesel vehicles affected by the emissions scandal.

Audi Australia told Fairfax Media the ACCC’s action didn’t provide any practical benefits to consumers. “The company believes that the best outcome for those valued customers with an affected vehicle is to have the voluntary recall service updates installed,” its spokesperson said. The company will review the ACCC’s claims and defend class-action lawsuits from private drivers.

The Audi-branded vehicles covered by these proceedings are:

A1 3 Door – 2011 to 2013
A1 Sportback – 2012 to 2015
A3 Sportback – 2011 to 2013
A4 Allroad – 2012 to 2015
A4 Avant – 2011 to 2015
A4 Sedan – 2011 to 2015
A5 Cabriolet – 2012 to 2015
A5 Coupe – 2012 to 2015
A5 Sportback – 2012 to 2015
A6 Avant – 2012 to 2015
A6 Sedan – 2011 to 2015
Q3 SUV – 2012 to 2015
Q5 SUV – 2011 to 2015
TT Coupe – 2011 to 2014

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Fiat Chrysler continues to fight EPA ban

Sergio Marchionne, chief executive of FCA

Fiat Chrysler CEO Sergio Marchionne has said his company is still trying to win approval to sell its 2017 diesel models in the U.S.

The EPA accused Fiat Chrysler of using hidden software to allow excess diesel emissions from 104,000 vehicles, including 2014, 2015 and 2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0-litre diesel engines, in the U.S. and refused to grant approval for the sale of 2017 models.

Marchionne told reporters at the Geneva Auto Show that “we have been dealing with the EPA and CARB. We have engaged legal counsel. The only thing I can tell you is that we continue to work with the agencies to try and resolve this.”

The U.S Justice Department said last week that the EPA is continuing to “evaluate certification of the new model year 2017 vehicles,” according to a court filing.

The car maker faces at least nine civil lawsuits related to the emissions scandal. A judicial panel will decide whether the cases should be consolidated before a single judge on March 30, according to Reuters.

If Fiat Chrysler wins certification for the 2017 models, Marchionne said he “can take that solution and apply it back to the 2014 to 2016 cars.”

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No defeat devices found in Fiat probe

Tests carried out on Euro-5 diesel vehicles sold in Italy have found to defeat devices, according to the Italian transport ministry. A final report on the investigation was published yesterday.

The ministry investigated 18 total diesel vehicles from various manufacturers in the wake of the Volkswagen emissions cheating scandal.

“Based on the tests, no defeat devices not permitted under emissions regulations in force in the European Union were found,” the ministry said in a statement.

The final report comes after a preliminary draft, obtained by Reuters last month, showed some Fiat Chrysler vehicles were initially allowed to skip key emissions tests during the investigation.

Reuters examined the data and found three of the seven Fiat Chrysler models investigated, including the Jeep Cherokee 2.0, Alfa Romeo Giulietta 1.6 and Lancia Ypsilon 1.3, contained missing results for on-road measurement phase and the EU ‘NEDC’ lab test. All seven Fiat Chrylser models also lack data for an ‘Artemis’ test, which adjust the lab test to reflect urban driving styles.

Previous testing by French and German authorities found the Jeep Grand Cherokee emitted between 5.3 and 9.9 times the legal nitrous oxide limit. Another independent road test of a Fiat 500L, which uses the same engine as the Alfa Romeo Giulietta 1.6, found nitrous oxide levels more than 5.6 times the limit.

In January, Germany’s transport minister, Alexander Dobrindt, called for several diesel Fiat models to be pulled from the market amid suspicions they were fitted with defeat devices. The European Commission also expressed concern at the vehicles.

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