Volkswagen has been exposed for cheating on emissions tests, making their vehicles appear cleaner than they actually are and drawing the ire of environmentalists everywhere.
The actions are also likely to have far reaching financial implications as regulators and lawyers circle the company.
Volkswagen issued an apology for violating United States emissions standards after the Environmental Protection Agency (EPA) for intentionally tampering with emissions tests for nearly 50,000 of its diesel-powered vehicles.
Volkswagen CEO Martin Winterkorn said that the German automaker is “deeply sorry” for its behavior, and the CEO is conducting an external investigation into the matter. Additionally, the company has required its dealerships in the United States to stop selling the cars involved in the situation until a solution can be found.
Volkswagen was accused by the EPA for installing the software on 482,000 of its diesel cars. This software enabled the company to cheat on emissions tests that are mandated by the EPA. Had the situation not been uncovered, United States citizens could have been exposed to dangerous pollutants at levels up to forty times of the allowable standard. This would have been particularly harmful for people with asthma and other respiratory conditions.
Winterkorn quickly issued a statement in an effort to conduct damage control.
"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,” he said.
Volkswagen faces up to $18 billion in federal fines, as the EPA can issue a maximum possible fine of $37,500 per vehicle. Additionally, Volkswagen might face charges of false marketing, a vehicle recall, and lawsuits as a result of the incident.
The company marketed its vehicles as “clean diesel.”
The state of California is also conducting its own investigation into the matter, separate from federal investigations.
According to reports, Volkswagen made use of a “defeat device” that tricked regulators into thinking that its vehicles were compliant with standards of the Clean Air Act for nitrogen oxides. The German car company admitted to United States investigators that it had used the device.
The cars involved include the Jetta, Beetle, Golf, and Passat from Volkswagen, as well as the Audi A3. The 2009 to 2014 versions of the Jetta, Beetle, and Golf are being investigated, as are the 2014 and 2015 versions of the Passat. For the Audi A3, the 2009 to 2015 versions are under investigation.
For the time being, Volkswagen dealers are being mandated by the company not to sell any of the four-cylinder diesel versions of these cars until a solution can be found. The loss of these potential sales is likely to put a major dent into the September sales performance of the company. Roughly 20% of the company’s sales come from vehicles with diesel engines.
AutoPacific analyst Dave Sullivan said, “It totally goes against all of the marketing they have had of a clean diesel. That’s one of the biggest selling points for Volkswagen."
It will be interesting to see if Volkswagen can rally from this major setback. For now, the car company is focused on restoring its public image.
Winterkorn said, “The trust of our customers and the public is and continues to be our most important asset. We at Volkswagen will do everything that must be done in order to re-establish the trust that so many people have placed in us, and we will do everything necessary in order to reverse the damage this has caused. This matter has first priority for me, personally, and for our entire Board of Management."