The IT Nerd

The day of reckoning has come for Volkswagen. At least in the US. The details on what Volkswagen is going to do about their dirty diesel cars has finally been made public, and it is not cheap for VW. Here’s the highlights (but if you want more details, click here):

• $10 billion to repair or buy back almost half a million Volkswagen vehicles with 2-litre diesel engines
• Each owner will get an additional payment of between $5,100 and $10,000
• VW will have to pay US regulators $2.7 billion for environmental mitigation and another $2 billion for research on zero-emissions technology.

A judge still has to give their okay for this to go ahead. And owners of dirty diesels can still sue VW. So this is far from over. Also, it should be mentioned that this is only for the US which means that VW will have to cut similar deals in Canada and anywhere else these dirty diesels were sold.

Volkswagen appears to be on the verge of an agreement with the U.S. government on how to fix their 600,000 polluting diesel vehicles.

Reports are trickling in with results of the court hearing, and it seems that VW and the Feds have finally reached a deal. The judge overseeing this whole mess has announced in a court hearing that an “agreement in principle” has been reached. In the deal, VW will offer affected owners a buyback, a lease cancellation option, and also the choice to have their vehicles fixed (once the fix is approved by U.S. government officials), Automotive News reports. It doesn’t solve VW’s ongoing legal issues, but it does cut down the number of issues that they have to deal with which is likely good for them. Expect details in the next few weeks.

I’m not sure how I missed this, but I’ll catch up now on the latest from the ongoing VW “Dieselgate” scandal. When I last covered this, VW had until March 24th to detail a fix for a US Judge who is presiding over a massive lawsuit regarding the emissions of so called “clean diesel” VW cars. It now seems that VW has missed that date and now has until April 21st to come up with a fix or else bad things will happen to them. Though it appears that they will miss this date too:

EPA Administrator Gina McCarthy told reporters that the two sides were in “really robust” ongoing talks but said she did not know if they would agree to a deal by April 21. She declined to say if the administration would accept a partial fix of the polluting vehicles or if it would insist that Volkswagen offer to buy them all back.

Now this may have something to do with this report that says that the fix that VW has come up with may increase fuel consumption. Good fuel economy is one of the reasons why people go Diesel which makes this an undesirable result:

The automaker’s latest setback comes in the form of news from Germany that the planned recall of its emissions-cheating vehicles has been halted due to an increase in fuel consumption. Automotive News Europe states that the “fix” Volkswagen has been applying to 160,000 of its Passat models has been paused, though the company calls claims of greater fuel consumption “speculation.”

Still, the Volkswagen spokesperson has acknowledged that German authorities are investigating these reports. “We have to guarantee that noise and especially CO2 emissions are exactly the same as before the fix,” said the company representative. The Germany Federal Motor Transport Authority was expected to have its investigation wrapped up by March 27, but it appears the issue required further time. A final “yes” or “no” to VW’s resolution will be announced this week or next.

This suggests that VW is struggling to find a fix that doesn’t negatively alter the behavior of these cars. If that is true, that is problematic for VW who really need to make this go away sooner rather than later.

If Volkswagen wants to avoid potentially having to pony up $46 billion dollars in relation to a lawsuit filed by the US Justice Department over Dieselgate, VW needs to have a fix in front of a judge by March: 

U.S. District Judge Charles Breyer in San Francisco said he wants a definitive answer on the status of a fix by March 24.

Noting that VW had admitted in September that its vehicles on U.S. roads were using software  to emit up to 40 times legally allowable pollution, Breyer said time was running out.

“Six months is long enough” to determine if this is a fixable problem, Breyer said. “This is an ongoing problem.”

No kidding. VW must by now know if and how these cars can be fixed and how to make this go away. By not speaking to that, they’re not making life easy for themselves and for their owners. Frankly, if I were a VW diesel owner, I’d be really ticked off right now. Tune in on March 24th to see if VW speaks to how they will fix these cars, or if they will be cutting a cheque.

It seems that Volkswagen is about to get its day in court as the US Environmental Protection Agency Department Of Justice is suing Volkswagen for cheating on the emissions of their diesel vehicles. Here’s what the CBC has to say on this:

A civil complaint filed in Detroit Monday does not include criminal charges but would involve additional monetary penalties for Volkswagen, which admitted in September that it had installed software on 11 million vehicles worldwide designed to beat emissions tests.

All told, the maximum possible fine would total in the billions, and comes on top of numerous class action suits being pursued on behalf of owners.

That’s sure to further erode whatever positive image that Volkswagen has left. I’m going to guess that this will never make it to trial and VW will try to settle this out of court. But we will have to wait and see on that front, and it will be interesting to watch.

Take this for what its worth given the source that its coming from. Volkswagen who has been at the center of a storm because of diesel cars that had software on them that cheated emissions tests put out some news that less cars than previously thought were affected by this cheating:

Volkswagen said only about 36,000 vehicles were affected, far fewer than the 800,000 for which it said last month it had understated CO2 emissions and consequently their fuel usage.

“Only a small number of the model variants of new cars will have the catalog (CO2) figure slightly adjusted,” VW said.

So…. Volkswagen has declared Volkswagen innocent. Or at least not as guilty as previously thought. Do I buy that? No. But I’m jaded, skeptical, and not really the trusting type. I’d love to see someone like the EPA confirm that this is true before I give VW a pass on this.

When it rains it pours for Volkswagen. According to a Reuters story, Volkswagen officials knew at least a year ago that some of the company’s officially-reported fuel-efficiency claims were overstated. From the article:

Volkswagen’s top executives knew a year ago that some of the company’s cars were markedly less fuel efficient than had been officially stated, Sunday paper Bild am Sonntag reported, without specifying its sources. … Months after becoming aware of excessive fuel consumption, former Chief Executive Martin Winterkorn decided this spring to pull one model off the market where the discrepancy was particularly pronounced, the Polo TDI BlueMotion, the paper cited sources close to Winterkorn as saying.

Lovely. If this is true, this is another body blow to a company that is already on very shaky ground in terms of its trust level with consumers. This is one story we’ll have to keep an eye on to see where this goes.

It seems Volkswagen’s emissions cheating scandal is more widespread than previously thought. The Globe And Mail among others is reporting that this scandal affects gas powered vehicles as well:

Volkswagen AG said it found faulty emissions readings for the first time in gasoline-powered vehicles, widening a scandal that so far had centred on diesel engines. The shares fell the most in almost five weeks.

Volkswagen said an internal probe showed 800,000 cars had “unexplained inconsistencies” concerning their carbon-dioxide output. The auto maker had previously estimated it would need to recall 11 million vehicles worldwide, and it was unclear how much overlap there was between the two tallies. The company said late Tuesday that the new finding could add at least €2-billion ($2.2-billion) to the €6.7-billion already set aside for repairs. The company’s Porsche unit said it’s halting North American sales of a model criticized by U.S. regulators.

For now, it’s just these models that are affected:

Volkswagen’s Polo, Golf and Passat models are affected as well as the subcompact A1 and the A3 hatchback at the Audi premium brand, a Volkswagen spokesman said by phone. The affected models at other brands include the Skoda Octavia, the Seat Ibiza and the Seat Leon.

If this report is true, then it really could be the extinction moment for Volkswagen. There would be zero reason to trust them which means that sales would fall through the floor. Of course there could also be something else that makes this worse than it already is. I say stay tuned. This is likely to get interesting in a hurry, and not in a good way for Volkswagen.

It seems #DieselGate is back with a vengeance.

Many news outlets including the BBC are reporting that US regulators have found more Volkswagen diesel products that have the infamous “defeat device” which allows them to cheat on emissions tests:

Porsche, Audi and VW cars are all included in this new investigation, which affects at least 10,000 vehicles.

The Environmental Protection Agency (EPA) said that cars with 3.0 litre engines from the years 2014 to 2016 were affected.

The folks at Volkswagen say that they’re not cheating:

However VW denies the vehicles have software designed to cheat tests.

Instead the company says that cars with the 3.0 litre diesel V6 engines “had a software function which had not been adequately described in the application process”.

Sure. Like anyone is going to believe them now. In case you’re interested, here’s the models that are at the center of this:

• 2014 VW Touareg
• 2015 Porsche Cayenne
• 2016 Audi A6 Quattro; A7 Quattro, A8, A8L and Q5

You can bet that owners of these vehicles are going to be asking their dealer and VW lots of questions that I am sure that neither really wants to answer.