For years, the American public has bought Volkswagens in large part due to their excellent fuel efficiency, low emissions, and environmental friendliness. Unfortunately, not only do these vehicles emit higher amounts of pollutants, but they actually expel volumes of nitrogen oxides more than 40 times greater than allowable limits in the United States.
The Environmental Protection Agency (EPA) has recently discovered that hundreds of thousands of Volkswagen vehicles being sold in the United States (and potentially 11 million worldwide) were fitted with devices implanted into diesel engines known as “Defeat Devices.” These instruments could detect when the vehicles were being tested and modify performance to fraudulently alter the results of emissions tests. The German automaker has admitted to their deception, leaving everyone wondering what comes next.
Furthermore, the admitted use of defeat devices by Volkswagen has now raised suspicion that other automakers may have been subverting EPA testing procedures. Various regulatory agen
cies are currently looking into the possibility that other manufacturers have used similar dishonest practices, but Ford, BMW, and Renault-Nissan have already denied the use of defeat devices.
Affected Makes and Models:
The models involved in the emissions scandal include:
• Volkswagen Jetta TDI (2009-2015)
• Volkswagen Jetta SportWagen TDI (2009-2014)
• Volkswagen Beetle TDI (2012-2015)
• Volkswagen Beetle Convertible TDI (2013-2015)
• Audi A3 TDI (2010-2015)
• Volkswagen Golf TDI (2010-2015)
• Volkswagen Passat TDI (2012-2015)
• Volkswagen Golf SportWagen TDI (2015)
Volkswagen has also ceased sales of all 2.0-liter TDI four-cylinder diesel engines, which are installed in 2015 Beetles, Golfs, Jettas, Passat TDIs, and Audi A3 TDIs. Additionally, 2016 four-cylinder diesel models are currently suspended and are awaiting certification from the EPA.
Legal Action:
In a rush to manage the public’s reaction to what may be the largest liability case in history, Volkswagen has fired former CEO Martin Winterkorn and launched an internal investigation led by their new CEO, Matthias Mueller – the former CEO of Porsche. A recall of nearly 500,000 cars in the United States will begin in January, but the financial implications will likely reach much further. Volkswagen is subject to a maximum fine of $37,500 per vehicle that could total approximately $19 billion dollars. The automaker’s shares have already plunged 30% since news of the scandal broke. There is also speculation that the US Justice Department may launch a criminal probe in the coming weeks.
Legal action is already underway. Various firms (including Crosley Law Firm) are filing suit alleging fraudulent concealment, breach of contract, false advertising, and violation of consumer protection. Over 200 federal class-action lawsuits have been filed against Volkswagen since the story broke, and many suspect that these cases will be consolidated before a single judge in Los Angeles, as it was the California Air Resources Board who presented crucial evidence against the automaker. "This is going to be huge. It might be the largest liability we've ever seen," said Gregory Keating, a law professor at USC. "The culpability is so clear. This is deliberate fraud, and they spent a lot of time concealing it."
Now that this information has come to light, these Volkswagen models are no longer legal to drive in most states, leaving owners frustrated and seeking compensation. In pursuing legal recourse, Volkswagen owners will likely be entitled to a return on premiums they paid to upgrade to the diesel model of their vehicle rather than the gasoline version. Owners will probably also be eligible to recover potential losses in resale value. Given that fuel efficiency will almost certainly drop significantly when the vehicles are repaired, owners will also likely be compensated for higher long-term fuel costs. And the further fuel efficiency plummets, the more Volkswagen will have to pay to resolve cases. A spokesperson for the German auto giant has confirmed that the company has already earmarked more than $7 billion dollars to cover the costs of the unprecedented recall and subsequent repairs.
