Since the Volkswagen (“VW”) scandal surfaced, the company’s stock has plummeted, trading down over 40% from its earlier 52-week high.  The world’s largest automaker is in serious trouble after the group was found to have cheated the United States pollution testing on over 500,000 diesel vehicles. Instead of using technology for good, this is a clear case where the technology was used to evade the EPA.  VW finally has publicly admitted to using software to rig emissions testing and circumvent environmental regulations on some of its diesel powered cars.

VW falsely claimed to have the technology to produce diesel engine vehicles that produced great fuel efficiency with little harm to the environment. Diesel engines, typically are 30% more fuel efficient, but come at a cost of emitting substantially higher levels of nitric oxide and nitrogen dioxideVW marketed there diesel vehicles to be fuel efficient, “clean diesel” cars when in fact, the cars were spewing pollutants at all times and only meeting the EPA’s emission standards when they were being tested. According to the EPA, the cars in question could emit 40x the legal standard of nitric oxide and nitrogen dioxide.

So what is next for VW and the rest of the car industry? Could other car manufacturers be doing similar practices? How can it be so easy to avoid detection from the EPA? Since the scandal has only recently broke more information will so trickle out and the investigation in the coming months will hopefully reveal additional facts and ultimately answers. In the meantime, VW faces massive fines from the EPA ($37,500 per violation potentially totaling $18BN). No other car manufacturers have been indicated or accused of rigging emissions testing, but I am sure the EPA and other regulatory agencies are looking into ways to strengthen its technology to adequately regulate car emissions in the future. Ultimately, it will be interesting to see if criminal charges are brought against any individuals at VW and keep an eye on how the investigation and scandal continues to unfold.

Jason Drory

One Response to Das Auto – Volkswagon Das Cheats the EPA

  1. amorris says:

    Clearly something needs to be done, since VW is not the only one. Hopefully, there will be large penalties for all the offenders big enough to keep them from flouting regulation.