As predicted, 24 hours after the departure of Volkswagen CEO Martin Winterkorn, the diesel emissions scandal has spread into Europe. Here’s our rolling blog of what we’ve learnt…
Friday 25th September
Matthias Müller confirmed as new CEO
As expected, Matthias Müller has been confirmed as the new CEO of Volkswagen Group, replacing Martin Winterkorn, who resigned earlier in the week. You can read about Müller, here.
Fines up to $37,500 per vehicle
The US Environmental Protection Agency (EPA) has just concluded a media call, in which its director, Christopher Grundler, reiterated that VW could be fined up to $37,500 per violation.
Faced with criticism that it failed to react sooner, Grundler said the EPA was “not naive”, but did say “we are upping our game.” Acting assistant administrator Janet McCabe said the EPA has written to all carmakers saying it would be stepping up its testing in the wake of the scandal.
We now await the conclusion of the Volkswagen board meeting, in which Matthias Müller is tipped to become CEO.
Daimler ‘categorically deny’ any accusations
Daimler has been quick to distance itself from the scandal casting a huge shadow over its German counterpart. In a statement, it made the following points:
“We categorically deny the accusation of manipulating emission tests regarding our vehicles. A defeat device, a function which illegitimately reduces emissions during testing, has never been and will never be used at Daimler. This holds true for both diesel and petrol engines. Our engines meet and adhere to every legal requirement.
In light of the written request by the DUH, which was sent to us this morning with a deadline to respond by 3:00 pm (CET), and the seven questions they posed, we can confirm that none of the allegations apply to our vehicles. The technical programming of our engines adheres to all legal requirements.
We have no knowledge of measurements that indicate our vehicles did not meet legally required standards.
We actively support the work being done within Europe and Germany in order to develop new testing methods which measure emissions based on real driving conditions.
We work closely and constructively with the responsible authorities in Germany, Europe and the United States and will willingly provide any vehicle for testing.
And so the saga continues. The Environmental Protection Agency (EPA) is expected to issue a statement at 3pm.
RAC: ‘an uncomfortable light’
The UK’s motoring organisations are adding their weight to the debate over the ever-widening scandal. Earlier today, RAC chief engineer David Bizley said: “While there is no evidence that other manufacturers have been seeking to defeat emissions tests, news that the Government is launching its own investigation should go some way towards restoring battered consumer confidence.
“The VW revelation is now shining an uncomfortable light on the emissions testing system, parts of which have been recognised for some time by all parties to be well past their ‘sell by’ date.
“A new EU test has been in the pipeline for some considerable time, and the expectations are that results will be much closer to real-world driving, but it is unrealistic to think a laboratory test will ever mirror completely a car being driven on a real road by different drivers.
“As this is not due to take effect until 2017 all attention must now be put on ensuring the test cannot be defeated by software so that consumers can be confident in the emissions levels of the vehicles they are buying.”
Greenpeace: ‘no more lies’
Greenpeace has been protesting outside the board meeting in Wolfsburg, taking to Twitter to demand “no more lies.”
— Greenpeace e.V. (@greenpeace_de) September 25, 2015
On its Energy Desk website, Greenpeace has said the Volkswagen emissions rigging scandal “could be responsible for hundreds of extra deaths a year, due to increased risks of chronic diseases from air pollution. “The analysis comes as research by Greenpeace’s investigations unit found that of the 11 million cars potentially affected by the fault up to 400,000 were sold in the UK alone.”
Greenpeace goes on to quote the US Environmental Protection Agency (EPA) statement which suggests the vehicles emit 10 to 40 times as much pollution as allowed by legal limits. This could, according to Greenpeace, have led to excess NOx (Nitrogen Oxides) emissions of between 60,000 and 24,000 tonnes a year.
Greenpeace claims this could cause “approximately 1,700 premature deaths a year due to increased risk of chronic diseases from air pollution such as cardiovascular diseases, strokes and ischaemic heart disease.”
1.2-litre TDI engines also affected
The supervisory board meeting is well underway and, according to Reuters, is taking longer than expected because a new corporate structure is also being discussed. Earlier this afternoon, German transport minister, Alexander Dobrindt, announced that 1.2-litre diesel engines are also affected by the scandal, adding to the 1.6-litre TDI and 2.0-litre TDI already confirmed.
As yet there’s no word on the V6 TDI units, although light trucks have also been manipulated to cheat the emissions test. It means a total of 2.8 million vehicles in Germany are affected, resulting in Volkswagen shares slumping by between 3 and 4%.
Volkswagen facing ‘lawsuit tsunami’
CNN is reporting that Volkswagen is already facing 34 federal lawsuits in the wake of the diesel emissions scandal. Owners are claiming their cars are less valuable than before and suing Volkswagen for compensation.
This follows the $1.1 billion settlement Toyota agreed to pay in 2014 following the unintended acceleration issue, with $250 million set aside to compensate owners of cars bought between September 2009 and December 2010. The owners claimed their cars were worth less thanks to the negative publicity surrounding the brake pedal issue.
So there’s certainly form for this kind of settlement. As Deutsche Welle is reporting this morning, ‘the biggest-ever class action lawsuit against the company’ is tantamount to a ‘lawsuit tsunami headed for Volkswagen.’
Thursday 24 September
According to Germany’s transport minister, Volkswagen has admitted using the same methods in Europe as it did in the US. Alexander Dobrindt also said he had been told 1.6-litre and 2.0-litre diesel engines are affected, although he was unsure how many of the 11 million vehicles involved were actually sold in Europe. Given the popularity of diesel-engined cars in Europe, the scandal could be even bigger than that witnessed in the US.
Senior managers set to leave?
German newspaper, Bild, is reporting two high-ranking Volkswagen engineers will be forced to quit. Friday’s supervisory board meeting could signal the end for Wolfgang Hatz (below), head of research and development at Porsche and head of engines and transmissions development at Volkswagen. At the same time, Ulrich Hackenberg, head of Audi’s technical development is expected to be asked to leave. According to ITV, Michael Horn, chief executive of Volkswagen US, will also be dismissed. Horn is the CEO who famously said Volkswagen had “totally screwed up”, after news of the emissions rigging first surfaced.
BMW shares down 7%
Meanwhile, shares in BMW are down by 7% after reports suggested the emissions of its X3 exceeded EU levels. For its part, BMW has said “The BMW group does not manipulate or rig any emissions tests. We observe the legal requirement in each country and adhere to all local testing requirements. “We are not familiar with the test mentioned by Auto Bild concerning the emissions of a BMW X3 during a road test.
No specific details of the test have yet been provided and therefore we cannot explain these results.” Earlier today, other carmakers saw their shares take a nosedive, with Peugeot taking a 6.7% hit. Daimler lot 5.6%, Chrysler 5.2% and Renault 3.7%. Shares in Volkswagen recovered following Winterkorn’s exit, trading 1.4% higher than the time before his departure.
Skoda models affected
Soon after lunchtime, Skoda was dragged into the scandal, with another of its models linked to Dieselgate. In a tweet, Greg Kable said:
The UK response
Predictably, MPs in the UK are taking an interest in the story, with Louise Ellman, chair of the transport select committee, saying: “There are questions over whether the testing authorities commissioned by motor manufacturers are truly independent. Do the results found in test conditions truly reflect real life situations on the road?
It is vital that the UK Government, the authorities in Germany and in the European Commission take action to clarify the extent to which vehicles on UK and European roads are affected by the issues that have been identified in the United States. They must take steps to restore public confidence.”
More to follow…