Volkswagen rigged tests on 2.8M cars in Germany, Berlin says
reuters.com
reuters.com
Financial penalties applied to a company this size basically just get socialised. Either employees (generally innocent of this) lose their jobs as the company closes factories, or the price of future cars goes up, or even the company goes entirely bust in which case that doesn't actually help anyone at all. The only non-socialised effect of a penalty is to punish shareholders - who are also innocent of this (and arguably even that is socialised, since pension funds probably own large chunks of most car companies!).
The people who are guilty are the people who decided to install this software, who installed it, who kept it installed - and the people who were supposed to put in place checks to prevent this sort of fraud from happening, from the CEO on down.
The correct response for society, in my opinion, is not to try and apply a punishment to "the company", which is mindless and is only the product of people's decisions, but to make those people accountable. They were guilty of fraud, either directly (very serious) or by lack of diligence (somewhat less serious but still criminal). We have laws about fraud. Apply those laws, put those people in jail, and the next bunch of smartasses who think they can put fraudulent software in cars with this will think twice about it - and probably not do it.
In other words, this is a state, criminal matter. Approach this much like any other form of organised crime - investigate, offer reduced penalties for information, and put people who were guilty of this high-level organised crime in jail.
Take the U.S. President for example. They almost always change their policies when actually taking office due to new internal information from government. The government faces unique challenges from that of an individual person, and so the individual must act differently when making decisions for the large organization.
In terms of losses to shareholders, this is no different than if VW had decided to burn all their factories to the ground and go into the sausage-making business, which then failed spectacularly. The shareholders get "punished" for that, and we would expect nothing different. Why should a legal failure be treated more leniently than a financial failure?
I don't really see a massive run on people trying to sell or return their car. I'm sure a few will to try to make a point, or perhaps to try to get a new car out of the deal.
That's my prediction for the record!
Isn't it possible that running these engines at the EPA recommended levels just isn't possible? That if they were to run like this 100% of the time, reliability, mpg, or power would be greatly reduced for various reasons?
There is a reason they took this huge risk to put in the cheat (but maybe management didn't think it was a big deal). It seems like there is too much risk involved in cheating for just minor fuel economy and power gains.
I read elsewhere that their technique for cleaning the exhaust can gunk up the filter more quickly too, so it might also change the maintenance schedule. Which, again, may not really be a huge issue for a car owner, but could impact VW.
The estimate of worth, and estimate of fuzziness, assumes that VW wasn't deliberately hiding crucial information from the market.
I think the truth is that it is so rare for a car to be sold at 0 miles that we don't really have a price point on it. It is effectively an illiquid good, so the pricing is just a meaningless number, because no one would sell their car at this fictitious price. Like how no one will bought 37 Signals for 100 billion dollars. [1]
[1] https://signalvnoise.com/posts/1941-press-release-37signals-...
Here are a few listings to check out, as proof they exist:
http://www.cars.com/vehicledetail/detail/648714782/overview/
http://www.cars.com/vehicledetail/detail/647726128/overview/
http://www.cars.com/vehicledetail/detail/645336026/overview/
I can't be arsed to do the comparison to see how much value they've actually lost compared to new, but the data is there to prove or disprove the claim.
VW screwed up so badly.
[1]: http://www.ferner-alsdorf.de/rechtsanwalt/zivilrecht/vertrag...
Besides fuel economy heavily depends on load, driving style, trip length, conditions, where you are driving (city, autobahn, ...), how fast you are driving, which tires you're using and so on.
Even if there is a measurable change I think it would still be difficult to convince a court that this is a damage, a customer deserves to be compensated for.
It's be cheaper than a refund (which is unlikely) and would allow them to bring the cars back into compliance.
https://hyundaimpginfo.com/customerinfo/compensation-informa...
Really the car the consumer got was better (to them) than the product ordered. It had better gas mileage, and better performance than it should have had.
The net loser in the trick was the environment (/ the world). If a company does a trick to make money and hurt the environment, the government should step in and make them pay, right? Like if I run a tire shop and secretly burn all my old tires in the back yard.. my customers weren't hurt (directly), but the entire environment was.
I expected 99x and 89y, but I got 120x and 70y
vs
You lied and spewed toxins all over the environment
as the first case requires some kind of weighting. Like if a pair of shoes advertises weighing 12 ounces, but they made a silent upgrade to only weight 11 ounces.. 99.9% of people are happy for that. The .1% of people who use shoes for boat anchors are not happy.
Two exceptions are: people who prioritize environmental impact over solely personal short-term ones ("act local, think global"); and people who will now have to waste time to get the car fixed so it will pass local smog testing.
So I disagree with that interpretation (getting something better than promised; it's only in the very limited sense of average gas milage). I own a TDI and am affected, fwiw.
If the tires spewed asbestos and no law was against you driving them, then I think my argument still stands.
A diesel engine with an EGR operating doesn't efficiently burn off all the fuel which, in addition to loss of power, produces greater particulate matter (pm) emissions which intern need to be filtered from the exhaust. The exhaust filters can become clogged with pm soot and the way it's cleansed is by injecting and igniting fuel in the exhaust to burn off the soot. If the EGR was continuously in operation then this burn off process would happen with greater regularity increasing the operating temperature of the exhaust system which would probably require more heat shielding and cooling.
Another option is a selective catalytic reduction (SCR) system. Assuming one could be retro fit on these cars, an SCR would probably have the last impact on the vehicle's operation but would introduce new maintenance concerns for the operator (DEF fluid) and Volkswagen.
The good news for VW is that the cars aren't worthless, so they can buy them back and sell them. For people who want to keep their car there will probably also be a cash offer.
Fiat Chrysler recently announced a buyback as part of a consent decree with the NHTSA:
http://www.nbcnews.com/business/autos/fiat-chrysler-buy-back...
> As to how much money an owner might receive under the buy-back program, the consent order stated that FCA must "refund the purchase price paid by the first purchaser of the vehicle for purposes other than resale, less a reasonable allowance for depreciation, and not including the cost of modifications made to the vehicle after the first retail sale." To sweeten the deal, a 10 percent premium will be factored into the initial purchase price.
Not a bad deal actually and this was defect based, not fraud based. I think VW would be incredibly lucky to have such a settlement.
Not to mention that they are probably "too big to fail" [2].
That said, the US has bailed out the auto industry before to preserve American presence in the market. Germany may opt to do the same, but they are home to other successful automakers.
I have no idea what the intricacies of German bankruptcy laws are, but I imagine they could cut a deal with car owners, and then emerge back out of bankruptcy in whatever German equivalent manner that would occur. That scenario will never happen though, there won't be enough global coordination between vehicle owners. The only way that type of outcome occurs, is if the US Government nudges it that direction (US car owners doing that would be enough to bankrupt VW).
Just look a those EPA mpg estimates, everybody seems to game the system and "tune" their cars to get highest ratings. Does anybody still hope to get anywhere near the estimate when buying a new car, especially city mpg?
I would argue this sort of manipulation is done widely and was pretty well known and accepted but VW must have overdone it. Of course Diesel cars have potential for worse emssisons than gas but I bet this happens across the board, except the Germans are screwed because they are pushing Diesels.
Yeah if it were just a firmware patch VW would not have set aside billions to deal with the fallout and had the CEO resign.
The high pollution in some city centres (eg London) and the associated death rates are driving change.
http://www.economist.com/news/leaders/21666226-volkswagens-f...
Electric cars will never reach that much consumers in Asia as it has in US. Very few people in Shanghai/Seoul/Tokyo own private garage to charge cars in over night.
And this is why Toyota/Hyundai are stubbornly pushing Hydrogen cars.
Whether or not the areas cars are parked have the appropriate wiring to facilitate chargers is another problem entirely. And quite frankly, I'm still skeptical our electric grid can handle everyone plugging in a car - solar panels or not. It's been overcast here for 4 days straight, if I had to plug my car in, it'd be drawing from an already strained grid. If everyone in my neighborhood did the same thing, I can see a lot of rolling brownouts.
> Researchers ... have calculated that the grid has enough excess capacity to support over 150 million battery-powered cars, or about 75 percent of the cars, pickups, and SUVs on the road in the United States.
To me electric busses seem a no-brainier for municipalities: they have predictable routes so you can schedule around charging times, fuel costs can be beneath what you'd pay for gasoline, and cities looking to reduce their carbon footprint can point to the busses and a demonstrable difference.
I would like to be proven wrong, but in markets with low level of private garage ownership, pure EV won't succeed.
China is pretty excited about electric cars.
http://www.bloomberg.com/news/articles/2015-04-23/china-won-...
> China [is] the only market where Toyota sells EVs.
Second: taxes. The buyer pays less taxes (at least in Europe) if the pollution is less than a certain value.
And more, I am sure.
The NOx problems were mostly resolved through the injection of urea into exhaust gases (e.g. AdBlue), dramatically reducing NOx emissions while leaving the efficiency and power unaffected. Urea systems add an extra cost and complexity to the vehicle though (not to mention that you need to top up your urea additive occasionally), and VW seemed to find a loophole that allowed them to make small, inexpensive cars without urea injection. They did this by injecting fuel into the exhaust in the absence of Urea, but to achieve the same effect. But this can gunk up the NOx trap if used endlessly (it is far less precise than urea, obviously), reduces fuel economy, etc, so they built this One Little Trick that only actually does that during identified tests.
http://ask.cars.com/2012/11/why-do-some-volkswagen-diesels-u...
VW claimed to have a trick that removed the need for it on their smaller, lighter cars. But that trick was a trick that only allowed them to pass EPA tests.
However, VW added the AdBlue system to the 2015 Jetta TDI -- perhaps because they knew that this was a problem:
http://www.bimmerfest.com/forums/showthread.php?t=765593
On top of that, even though the Passat has an AdBlue urea system, it's still affected:
On the open road, a Volkswagen Jetta TDI blew through the
U.S. nitrogen oxide (NOx) emissions limit by 15 to 35
times. A VW Passat TDI (with urea aftertreatment) was 5
to 20 times the maximum.
So yeah, I'm not a happy owner right now.