{"id":3621,"date":"2015-09-25T13:13:21","date_gmt":"2015-09-25T17:13:21","guid":{"rendered":"http:\/\/ncjolt.org\/?p=3621"},"modified":"2020-06-04T20:53:34","modified_gmt":"2020-06-04T20:53:34","slug":"volkswagen-caught-equipping-11-million-cars-with-software-to-cheat-emission-tests","status":"publish","type":"post","link":"https:\/\/journals.law.unc.edu\/ncjolt\/blogs\/volkswagen-caught-equipping-11-million-cars-with-software-to-cheat-emission-tests\/","title":{"rendered":"Volkswagen Caught Equipping 11 Million Cars with Software to Cheat Emission Tests"},"content":{"rendered":"

On\u00a0Friday,\u00a0September 18, 2015, the Environmental Protection Agency (\u201cEPA<\/a>\u201d) sent a Notice of Violation<\/a> to Volkswagen Group of America, Inc. (\u201cVolkswagen<\/a>\u201d) stating that, in its ongoing investigation,\u00a0the EPA has\u00a0determined that several models of light-duty, diesel Volkswagen cars manufactured from 2009 to 2015 are in violation of federal emission standards. Later that same day and based on the EPA\u2019s notice of violation, the Obama administration ordered<\/a> Volkswagen to recall nearly 500,000 cars because the carmaker had installed illegal software to fake compliance with emission standards.
\nAccording to the EPA\u2019s notice, Volkswagen installed software<\/a> on the cars\u2019 electronic control module\u00a0that could sense when the vehicle was being tested for compliance with EPA emission standards. The software is known as a \u201cdefeat device<\/a>,\u201d which operates by sensing when the car is not being tested for emissions and consequently reducing (or \u201cdefeating\u201d) the car\u2019s emission control. For simplicity, the EPA referred to the defeat device as the \u201cswitch<\/a>\u201d in its notice. The switch checks inputs<\/a> such as the position of the steering wheel, the vehicle\u2019s speed, and the duration of the engine\u2019s operation to specifically monitor the factors of the federal emission test procedure used by the EPA. In other words, when the switch sensed the car was undergoing emissions testing, it would calibrate the car<\/a> to run in a mode specific for testing which increases the effectiveness of the emission control system and qualifies the car for certification. However, under regular vehicle operation, the switch would activate<\/a> and\u00a0calibrate the car to operate in its normal mode with vastly lower emission control. According to the EPA, this reduced emission control resulted in a significant increase of harmful nitrous oxide released \u201cby a factor of 10 to 40 times above EPA compliant levels.<\/a>\u201d
\nIn what was likely an attempt to reduce the sting of the EPA\u2019s continuing investigation, Volkswagen admitted on Tuesday, September 22, 2015, that 11 million of its diesel cars worldwide<\/a> have been equipped with software designed to cheat emissions tests. The company followed with a statement that it would set aside \u20ac6.5 billion, or $7.27 billion<\/a>, to win back the trust of its customers and pay for the affected vehicles\u2019 necessary servicing. Despite the good faith act of reparation, however, Volkswagen could face tremendous fines totaling up to $18 billion<\/a> in the United States alone. In addition the carmaker may face fines in other countries which are now investigating Volkswagen cars for noncompliant emission control. Perhaps most significant of all, Volkswagen executives could be criminally charged<\/a> for the company\u2019s fraudulent use of the software.
\nSince the EPA\u2019s notice, the pressure on Volkswagen has been rapidly mounting.<\/p>\n

German Chancellor Angela Merkel has urged Volkswagen<\/a> to restore confidence in the company, normally regarded as a paragon of German engineering,\u00a0as soon as possible.<\/p><\/blockquote>\n

In wake of the enormous pressure for change, Volkswagen\u2019s Chief Executive Officer Martin Winterkorn resigned<\/a> on Wednesday, September 23, 2015. Winterkorn had been CEO of the company since 2007, and under his administration, the company doubled in sales and nearly tripled in profit<\/a>. The carmaker has not yet named a successor, aiming to do so with a full board meeting<\/a> on Friday, September 25, 2015.
\nFinancially, Volkswagen\u2019s shares are down more than 30%<\/a> since the crisis went public, wiping out around $28 billion<\/a> of the company\u2019s market value. Advertisements in the U.S. featuring the company\u2019s iconic \u201cclean diesel\u201d theme have been stalled<\/a> while the company decides whether to pull the entire ad campaign. Sales of the affected 2016 models have been completely frozen <\/a>in the U.S. until the company\u2019s new models\u00a0comply with EPA certifications. Though Volkswagen is planning to continue selling in the EU, where emission requirements are less stringent, countries such as Germany, France, Italy, and South Korea have begun their own Volkswagen investigations<\/a>.
\nThough there is no immediate resolution to Volkswagen\u2019s crisis, perhaps complete transparency<\/a> from the company can help resolve the scandal as soon as possible and salvage the carmaker\u2019s brand in the eyes of the public. The crisis goes\u00a0beyond just the company, however. The repercussions of Volkswagen\u2019s purposeful evasion of the law will\u00a0potentially affect\u00a0the integrity of the German auto industry at large<\/a>. Market analyst Dave Madden<\/a> states that the carmaker \u201csector as a whole will be a sector to swerve until there is a conclusion to this saga.\u201d The Deutsche Bank<\/a>, Germany\u2019s largest bank, warned clients to\u00a0expect \u201ca potentially more sustained loss in brand value and prolonged recovery period ahead in the U.S<\/a>.\u201d Both financial investors and consumers hope to see Volkswagen do the right thing and offer total transparency<\/a> to expedite the ongoing, international investigations. Only then will the consequences be dealt as necessary and allow Volkswagen, the European automobile industry, and Germany\u2019s economy to begin recovering as soon as possible.<\/p>\n","protected":false},"excerpt":{"rendered":"

On\u00a0Friday,\u00a0September 18, 2015, the Environmental Protection Agency (\u201cEPA\u201d) sent a Notice of Violation to Volkswagen Group of America, Inc. (\u201cVolkswagen\u201d) stating that, in its ongoing investigation,\u00a0the EPA has\u00a0determined that several models of light-duty, diesel Volkswagen cars manufactured from 2009 to 2015 are in violation of federal emission standards. Later that same day and based on …<\/a><\/p>\n","protected":false},"author":1,"featured_media":3622,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[51],"tags":[],"_links":{"self":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/3621"}],"collection":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/comments?post=3621"}],"version-history":[{"count":1,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/3621\/revisions"}],"predecessor-version":[{"id":7302,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/posts\/3621\/revisions\/7302"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media\/3622"}],"wp:attachment":[{"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/media?parent=3621"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/categories?post=3621"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/journals.law.unc.edu\/ncjolt\/wp-json\/wp\/v2\/tags?post=3621"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}