The Volkswagen admissions scandal hit a new low for the auto group on Monday, November 2, 2015, when the U.S. Environmental Protection Agency (EPA) accused Volkswagen Group of installing “defeat-device software” in a wide range of vehicles. The EPA has indicated that the defeat-device software causes the vehicles to perform differently in testing conditions than when on the road. While being tested the software activates a temperature conditions mode, which can fool testing, making the vehicle appear as if it adheres to EPA’s pollution regulations under the Clean Air Act. However, while on the road the vehicles can produce nine times more nitrogen oxide pollution than is permitted under EPA standards.
The EPA announced Monday, that the defeat-device software now is believed to be installed in large VW SUVs as well as the luxury brands, Audi and Porsche, also owned by the auto group.
This new revelation casts further doubts on the German auto-giant’s sluggish and tempered response to the scandal, since the automaker was first accused by the EPA of installing the defeat–device software in its diesel cars on September 18 of this year.
Previously, 11-million VW diesel cars – Jetta, Passat, Golf and Beetle - were implicated in the scandal, which sought to circumvent environmental regulations through the installation of the software in the cars. Monday’s announcement by the EPA now includes the 2014 VW Touareg, 2015 Porsche Cayenne and the 2016 Audi A6 Quattro, A8, A8L and Q5.
The EPA’s Cynthia Giles attributed the recent announcement to new evidence stating “We have clear evidence of these additional violations and we thought it was important to put Volkswagen on notice and to inform the public.” VW finds itself potentially liable for civil penalties already projected to be as high as $18 billion for the scandal that originally broke in September. The EPA fines for this new revelation could be as high as $375 million dollars adding to the fines the company already faces.
This new announcement will certainly add to the growing number of consumers considering or actively taking part in litigation against the automaker.
Just last week Volkswagen’s new CEO Matthias Mueller, installed after the original scandal broke, told reporters that the company would do everything in its power to discover what occurred and how it happened as well as put internal measures in place to make sure nothing like this happens again. The company subsequently launched a number of internal investigations after the scandal first broke in September. Already, the U.S. Justice department has launched a criminal probe into the scandal and the estimated civil penalties may be so high as to require financial restructuring for the global carmaker. This new revelation reveals how deeply entrenched VW’s institutional issues are. The issues faced by the iconic carmaker may require much more than a simple re-shuffle of top executives from one branch of the company to another to restore pubic faith in the VW brand. Matthias Mueller had previously been the head of product management for Audi, and was the CEO of Porsche for 4 years and then its CIO before moving to Volkswagen to become CEO September 25, 2015.
In response to these new allegations Volkswagen has categorically denied that it installed the defeat-device software in any of the models announced on Monday by the EPA, and further stated that it was cooperating fully with the EPA investigation.
Still, the most important questions remain unanswered. How is the company going to fix the cars that are already on the road with the defeat-device software? How will the process of fixing the more than 11 million cars on the road be implemented and managed? What will happen to the consumers who no longer want their VW’s or experience a significant drop in the resale value of their cars due to the software updates due to be implemented by VW as it attempts to redress the regulatory violations in the affected models?
Consumers who purchased one of the affected Volkswagen vehicles are encouraged to contact Morgan & Morgan to discuss their legal options.
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