VW denies EPA’s new emissions cheating allegations

David Shepardson
Detroit News Washington Bureau

The emissions cheating scandal ensnared Volkswagen’s marquee brand, Porsche, as well as additional high-end cars and SUVs with six-cylinder diesels Monday. But the Wolfsburg, Germany-based automaker, which has admitted to the scam involving smaller engines, says U.S. regulators are off base in these latest charges.

The announcement from the Environmental Protection Agency and California Air Resources Board, fingering Porsche, Audi and VW vehicles, suggests problems that have rocked VW show no sign of abating. The latest fallout could prove even more costly to the world’s second-largest automaker: VW makes most of its profits in North America from Audi and Porsche.

The EPA said its new testing shows VW Group used software similar to that in its diesel cars to evade emissions rules in the 2014 VW Touareg, 2015 Porsche Cayenne and 2016 Audi A6 Quattro, A7 Quattro, A8, A8L and Q5. All are equipped with 3-liter diesel engines that allegedly allow emissions of nitrogen oxide up to nine times the levels allowed by the EPA.

At least 10,000 of the vehicles have been sold in the U.S. since 2014.

VW could be responsible for at least another $375 million in maximum fines for the additional vehicles, up from $18 billion the EPA said it faced in theory in September.

The illegal software may be on thousands of other vehicles with VW diesel engines dating back to 2009; testing by the EPA, California and Canada is ongoing.

Volkswagen AG issued a statement denying the allegations, emphasizing “that no software has been installed in the 3-liter V-6 diesel power units to alter emissions characteristics in a forbidden manner.”

Government agencies have been testing samples of all diesel passenger vehicles on U.S. roads after VW’s admission in September that it illegally installed “defeat devices” in 11 million diesel cars worldwide that allow them to emit up to 40 times legally allowable pollution. That includes 482,000 diesel cars sold in the U.S. since 2008.

The cars use sophisticated software to activate emission-reducing equipment during government testing. In real-world driving, it is deactivated.

Audi of America said Monday it was not immediately halting the sale of its 2016 diesels. Porsche Cars North America said in a statement that it was “surprised” by the EPA announcement, and had believed the Cayenne was “fully compliant.”

If Audi refuses to halt sales, the EPA could suspend the certificate needed to sell them. The EPA has not granted the certificate for suspect 2016 diesel VW cars.

Prior to Monday, Porsche hadn’t been touched by the scandal. Just one Audi car — a diesel Audi A3 — had been involved.

Audi spokesman Brad Stertz said the software at issue is not the same as in the 2.0 L diesel cars. "Our engineers need to find out more information about" EPA's testing and the data "and how they came to their conclusions."

Karl Brauer, senior analyst for Kelley Blue Book, said the latest report “casts a darker shadow on the VW Group. It also makes any past claims of ‘a limited number of people’ involved in the deception appear even more outrageous.”

“Volkswagen would do well to immediately and completely disclose all people and products involved in this deception, no matter how far-reaching. Repairing the automaker’s brand and regaining trust should be VW Group’s highest priority at this point, but it can’t begin until full and voluntary disclosure is achieved.”

Testing continues

The EPA completed testing late last week on the three models. VW was not told of the findings until early Monday.

In contrast, the EPA and California spent months earlier this year working with the automaker to try to figure out why independent researchers in 2014 had uncovered high emissions in real-world driving — only to learn in August from VW that it had misled the agencies for months.

The Detroit News has learned that the EPA tested the Touareg, Canada tested the Cayenne and the California Air Resources Board bought a new Audi A6 to test.

The EPA said testing of other diesel vehicles on the road have shown no evidence yet of cheating by other automakers, but said testing is ongoing.

Members of Congress expressed anger.

“The latest revelations raise the question, where does VW’s road of deceit end? The EPA expanding its investigation prompts questions regarding the prevalence of the emissions cheating and how it went undetected for so long,” said a statement from Reps. Fred Upton, R-St. Joseph; Frank Pallone Jr., D-New York; Tim Murphy, R-Pennsylvania; and Diana DeGette, D-Colorado. “Our bipartisan investigation continues — it’s time for Volkswagen to fully come clean.”

Cynthia Giles, assistant administrator of the Office for EPA’s Enforcement and Compliance Assurance, said, “VW has once again failed its obligation to comply with the law that protects clean air for all Americans. All companies should be playing by the same rules.”

California urged VW to come clean and admit if any other SUVs have “defeat devices” and said it would take that into account in assessing future penalties. VW must set up a meeting with California within three days to discuss the findings.

No recall issued

The scandal that began in September has so far prompted the German automaker’s CEO to resign; caused it to set aside $7.3 billion to begin covering the massive costs; and led to criminal investigations around the world. Last week the automaker reported its first quarterly loss in at least 15 years.

The Justice Department and federal prosecutors in Detroit are leading a criminal investigation into VW’s admitted cheating. The automaker faces more than 350 lawsuits around the country.

Six weeks after EPA initially disclosed the cheating, there is still not timetable for when VW will start recalling vehicles in the U.S. and fixing them.

The decision to allow higher pollution emissions will cause 59 people in the U.S. to die 10 to 20 years prematurely, according to a study from MIT and Harvard University researchers released last week. VW didn’t comment on the research.

But the research said if all vehicles are recalled by the end of 2016, more than 130 additional early deaths may be avoided. Without a recall, the compounding impact of excess emissions would cause 140 people to die early.

Diesel vehicles emit nitrogen oxides, which react in the atmosphere to form fine particulate matter and ozone that can lead to smog and cause health problems. They are not alone among machines emitting nitrogen oxides.