VW Risks $18 Billion Fine After US Regulators Caught It Cheating On Diesel Emissions Tests

VW is at the center of a huge scandal in the US after regulators found that the automaker has been cheating emissions standards with its diesel-powered models.

While testing diesel cars of the VW Group, the US Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) have detected manipulations that violate American environmental standards.

The cars in question contained software that turns off emissions controls when driving normally and turns them on when an emissions test is performed.

The EPA called this feature a “defeat device” and said it allows the cars to emit as much as 40 times the level of pollutants allowed under clean air rules. The agency said that VW could face fines of up to $18 billion as a result. The huge sum would result from a simple calculation: VW could face civil penalties of $37,500 for each vehicle which doesn’t comply with federal clean air rules. Since some 482,000 four-cylinder VW and Audi diesel cars sold since 2008 are involved in the allegations, the fine could reach a staggering amount.

The EPA urged VW to recall all 2009-2015 Volkswagen Jetta, Passat, Jetta Sportwagen, Beetle and Audi A3 cars with 2.0-liter TDI engines sold in the US.

The German automaker ordered an external investigation after the findings, with CEO Martin Winterkorn saying he was “deeply sorry” for the violation of US clean-air rules.

“I personally am deeply sorry that we have broken the trust of our customers and the public. We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter,” Winterkorn said in a statement.

“We do not and will not tolerate violations of any kind of our internal rules or of the law,” the executive added. He did not say who would carry out the external investigation.

VW has also ordered US dealers no to sell any remaining 2015 models with 2.0-liter diesel engines. The government prohibited VW from selling 2016 model year diesel cars with the 2.0-liter engine until the matter is clarified.

The ban is expected to significantly affect VW sales in the US, as diesel models account for 20 to 25 percent of the VW brand’s US sales each month.

Story references: Reuters, The Detroit News