The Numbers Keep on Rising

With the news of the Volkswagen diesel emissions scandal we have known the company would have to pay a large sum of money but the actual total amount has been hovering around different amounts for months. While the brand was supposed to have a fix in place by March it took them until May to figure out how to make the 2.0-liter models compliant with emissions regulations and it there still isn’t a fix for the 3.0-liter models. As the scandal continues we can see how this is going to continue to cost more money for one of the world’s largest automotive brands.

The problem for Volkswagen began several years ago, but the discovery happened only last year. We have seen evidence this scandal began as early as 2006 and has been going on ever since to become a serious problem for the brand. The challenge was to make the diesel powered engines able to meet the stringent emissions of the US EPA. What we know now is the testing was easy to cheat and a cheat device was developed and installed in the Volkswagen models that were powered by a diesel engine. With this device installed these vehicles would pass the test.

During the EPA testing the cheat device could detect the testing was taking place and turned on the emissions control systems of the vehicle. This device kept the emissions system turned off during regular driving which caused vehicles to emit nearly forty times the amount allowed by EPA regulations. Now that a fix for this problem has been found and court deadlines have begun to pass we see that nearly 475,000 owners of the Volkswagen models with the 2.0-liter engine will either have their vehicles repaired or will have a buyback given to them which will result in exchanging their vehicle for amounts that equal $5,100 to $10,000.

Previous indications where this scandal would cost around $10 billion, but that number has now gone up to be around $15 billion which will be the largest number in automotive history. The estimation is that nearly 85 percent of the owners of 2.0-liter TDI vehicles will trade theirs in for the buyback amount and put that money toward a new vehicle that will meet emissions regulations. In addition to the amounts paid out for the buyback the company will also be required to pay $2.7 billion in fines to the EPA and the California Air Resources Board along with another $400 million to the state of New York.

While this portion of the settlement will finalize some of the issues brought about by this scandal, this is far from over for Volkswagen. They still have not reached any form of an agreement regarding the 3.0-liter TDI vehicles and there are still criminal charges that are looming overhead. The criminal investigation is being led by the US Department of Justice over false advertising that is filed with the Federal Trade Commission and the attorneys general in 42 states, the District of Columbia and Puerto Rico.

To make matters even worse for Volkswagen there are similar legal actions awaiting the company in Europe and other areas of the world. While the cheat device was meant to fool testing in the US, it was used in vehicles all over the world to defeat the testing and allow the diesel engines to be used and remain fuel efficient. What was left out of the conversation for many years is the fact that these vehicles expel a huge amount of emissions into the atmosphere because of the device allows it.

During this entire scandal we have learned more about diesel engines that most of us thought we would, such as the fact that emissions control systems can be damaging to the engine. Even though Volkswagen has come a long way through this scandal they still have a long way to go in order to be completely done with this scandal and put it behind them. While this problem isn’t over, one portion of it is about to be finished and US owners will soon be able to have their vehicles fixed or purchased back from them.