The water heater was designed with the test in mind but functions the same regardless.
VW was clearly cheating whereas the water heater is taking advantage of known deficiencies in the test (is that cheating?).
VW knew the parameters of the test (stationary car, no steering input, prescribed throttle inputs, etc). And they configured the car to pass the test.
Water-heater engineer knew the parameters of the test (number and location of probes). And he configure the water-heater to pass the test.
Same-same. In both cases, an engineering team willfully committed fraud to improve their sales figures.
The only differences are a bit pedantic. VW's "configuration" was more elaborate. But, both groups gamed the test.
Apparently it is common for cars to have a "test mode" bit, because they run on a dyno (only one set of wheels spin), and the car may disable certain traction control systems, etc.
VW changed the way other systems (the engine itself) function in this mode. So even if everything is exactly the same on the road (e.g. 30mph in a straight line for hours), the car will perform differently and have different emissions. You don't drive around on a dyno.
Optimizing for the test may go up to the line, but VW crossed it.
The VW engineers designed the car to do different thing while being tested vs used by consumers. While being tested, the emissions system was on. While being used by consumers, the emission system was entirely disabled.
The water heater engineers designed the water heater to do the same thing while being tested vs used by consumers.
If the water heater engineers designed the water heater to never turn on and keep the water at room temperature while being tested, ("works good boss, water heater efficiency is infinity percent") then yes, it would be reasonable to claim they did essentially the same thing.
I think the difference between what they did and this is only a difference in degree and not kind though, right?
In both cases there was an intentional design change to deliberately changed mislead a measurement, and the final product does not match the intended thing. Both adversarially directly cause the consumer's purchase to not be the intended item; no one gets a car that has emissions measured and no one gets a heater that has the efficiency measured.
It is like the joke about Soviet factory metrics for some item like nails. They set the quota on numbers and got useless ones better described as needles. They wised up a bit and set the quota by weight next month and got one useless massive nail instead. It isn't even too far from the truth given actual management involved things like a train line circularly shipping coal between depots instead of retrieving from source or distributing to end users to boost their "metric tons transported kilometers" metric.
VW meanwhile had a covert illegal configuration while claiming mileage and lack of maintenancd urea. The claims are outright false - that it provides all three benefits instead of two of three.
The water heater runs the same regardless of whether it's being tested or is running normally in someone's home. Really, this test "cheat" exposed that the test itself was not measuring what it thought it was measuring; and hell, a manufacturer could accidentally cheat with their design.
The car would run differently if it detected it was in a test situation. In the real world, with a real driver, it would run in a way that would give different test results (if you were in a position to run the test while it's being driven).
"Cheating" a better efficiency rating is significantly less reprehensible than cheating a legal obligation which was legislated for public health and environmental reasons.
There are other differences here too, I think. The water heater trick is passive manipulation that stays in place at all times, which limits how far from "real" performance it can get. And per the story, it seems more like "teaching to the test" than "cheating". That is, Volkswagen consciously moved away from the mandate outside of testing. The water heater was (potentially) as energy-efficient as they could design, with the test score manipulated on top of that.
None of that makes it harmless - if "as good as you can make" doesn't hit standards without manipulating them, that's still a problem. But I do find it less galling than "intentionally worsens emissions outside the test bench".
The difference between the water heater and VW is the water heater manufacturer is providing a representative sample. And VW was not. It'd also be dubious to say that the water heater company is acting in bad faith. Where VW's bad faith rose to the level of criminal. On the other hand Volvo appears to be acting in strictly good faith.
Bad faith for a crash test would be crafting a silver plate model for testing. Reminds me that's what my uncle said the power supply manufacturer he worked for did.
While I agree that this particular water heater manufacturer was doing something shady in order to get the best score, at least they weren't selling a product that did something differently while under test conditions vs. in real-world usage. They merely realized that the test itself had wide error bars, and designed their heater to "err" in the positive side of those.
VW, in contrast, sold a product that lied to the testers about its emissions in order to pass certifications, while in real-world driving would behave in a way that would not pass muster.
And to me I think that's the key: VW's cars intentionally behaved differently depending on if they were being tested or if they were being driven in normal real-world usage. This water heater behaved the same regardless of whether it was being tested or was heating water in someone's home.
In a way I think of this in academic terms. The water heater manufacturer studied the SAT to learn what kind of questions were going to be asked. VW stole the answer key to the test and memorized it.