Washington — Volkswagen of America says most of the 482,000 diesel cars that used software to evade emissions standards will need a “major fix,” including a hardware upgrade that won’t start for at least another year.
VW U.S. CEO Michael Horn told a House Energy and Commerce subcommittee Thursday that 325,000 of the 482,000 cars with 2-liter diesel engines in the U.S. — those with “Generation 1” engines, which includes all 2009-14 models, including Passats through model-year 2011 — will need both a hardware and software fix. VW may have to add a urea tank or other exhaust system upgrades to those cars.
Horn said such modifications could require five to 10 hours of work at a dealership, and repairs are not expected to start until late 2016. He said the automaker is considering compensation to owners, including possibly buybacks.
Cars with Generation 2 engines — 90,000 2012-14 Passats — will get a fix that that may include hardware changes as well. Repairs are not expected to begin in the middle of 2016.
Finally, cars with Generation 3 engines — 67,000 2015-16 VWs — will require just a software fix. Repairs are expected to start in early 2016.
Horn said VW’s supervisory board and top leadership didn’t intentionally order the cheating, but said it was the work of a few individuals. Asked by Rep. Joe Barton, R-Texas, if it made sense that a company like VW could allow a fraud to go on for seven years without top leaders knowing, Horn was blunt.
“I agree it is very hard to believe,” Horn said. “Some people made the wrong decisions.”
The EPA’s head of its Office of Transportation and Air Quality, Chris Grundler, told Congress the agency expects to receive a proposal fix for the newest vehicles as early as next week. He said EPA still doesn’t know why VW cheated and who was responsible. He said VW would have to take steps to offset those excess emissions.
Some on the panel were critical that the EPA hadn’t caught the fraud earlier; West Virginia University discovered it with only about $100,000 in funding. Grundler didn’t blame a lack of resources, but said the agency is changing tests to be “unpredictable” to discover cheating by automakers.
Horn said the emissions fixes will not reduce fuel mileage, but acknowledged it could have a minor impact on performance. He said if there was a major impact, that the company would consider compensation to owners.
Rep. Fred Upton, R-St. Joseph, chairman of the House Energy and Commerce Committee, said, ““Volkswagen has betrayed a nation — a nation of regulators, loyalists and innocent customers. Either clean it up, or get off the road.”
VW has admitted to using software in 11 million 2009-2015 vehicles worldwide and has set aside $7.3 billion to pay damages. The company’s CEO abruptly resigned and the automaker has suspended several high-ranking officials. The Justice Department, at least 45 states and environmental regulators around the world are investigating. The EPA has said VW could face $18 billion in fines.
“The behavior to which VW admitted represented a fundamental violation of public trust,” said Tim Murphy, R-Pa., who chairs the subcommittee holding the first VW hearing.
Murphy said he planned to hold future hearings on the issue. The committee is still waiting for documents from the EPA and VW.
Rep. Marsha Blackburn, R-Tenn., said Congress wants to know the who, what, where, why, when — and “what else?”
Rep. Frank Pallone, D-N.J., said: “The American people are not crash test dummies and cannot be treated as such.”
U.S. law firm Jones Day is conducting an investigation at VW’s request. Horn said he can’t answer questions about what went wrong, since Jones Day is investigating.
The Senate Finance Committee is investigating VW’s use of tax credits worth about $50 million for the sale of some diesel cars. The Justice Department is investigating the use of those tax credits. Sen. Ron Wyden, D-Oregon, urged the U.S. Treasury not to try to recoup the credits from consumers who didn’t know about the cheating.
Horn told the committee that he had no reason to suspect that cheating was going on — even though he learned of emissions issues with the cars in 2014 after West Virginia University and an emissions research group raised questions about real-world emissions.
Horn apologized and agreed that the company has lost the trust of Americans. He disclosed the company has withdrawn its request for approval to sell the 2016 diesel cars. It also has issued a stop-sale on remaining 2015 cars with 2-liter diesel engines.