Volkswagen diesels duped emissions tests; big recall

Volkswagen called them “clean diesels,” branding them as the fun-to-drive alternatives to hybrids as it dominated the U.S. market for the engine technology.

It turns out the increasingly environmentally conscious buyers of the sporty German cars have been unwittingly pumping smog into the air because of software VW installed to cheat on U.S. emissions tests.

The world’s largest automaker has admitted selling 482,000 such diesels since 2009, California and U.S. regulators announced Friday. The scandal could cost the company billions of dollars in fines and lawsuit judgments and threatens to stunt the development of all diesel vehicles.

VW’s software trick allows the cars to emit up to 40 times the legally allowed amount of nitrogen oxide, environmental officials said. The automaker will have to recall all the vehicles and modify the emissions systems at its own expense, regulators said. Additionally it could face a fine of about $18 billion, or $37,500 per car, federal environmental officials said.

“It’s pretty ugly,” Kelley Blue Book analyst Karl Brauer said. “Volkswagen has far outstripped everyone else in selling diesel cars. This challenges everything they’ve been saying about those vehicles.”

Nitrogen oxide is among the auto pollutants that put more smog into California’s skies, said Richard Corey, executive officer of the California Air Resources Board.

“Under the hot California sun, (nitrogen oxide) cooks and creates ozone and fine particles,” Corey said.

The affected diesel models include: Jetta (model years 2009-15), Beetle (model years 2009-15), Audi A3 (model years 2009-15), Golf (model years 2009-15) and Passat (model years 2012-15).

The U.S. Environmental Protection Agency made its charges by sending Volkswagen a notice of violation of the Clean Air Act. It covers models equipped with 2.0-liter, four-cylinder diesel engines. The California Air Resources Board issued a similar letter for violations of state regulations.

Volkswagen and Audi vehicles from model years 2009 to 2015 have the software, which uses an algorithm that detects when the vehicle is undergoing pollution tests and changes the way it performs.

The EPA said the device senses the testing environment by analyzing a variety of data – steering position, speed, duration of engine operation and barometric pressure.

“These inputs precisely track the parameters of the federal test procedure,” the agency wrote in the notice of violation.

The test manipulation “is illegal and a threat to public health,” said Cynthia Giles, assistant administrator for the Office of Enforcement and Compliance Assurance. “We expected better from VW.”

Volkswagen admitted that the cars contained “defeat devices,” after EPA and the state air regulator demanded an explanation for the emission problems. The automaker issued a statement saying it is cooperating with the investigation and declined to comment further.

VW is the world’s biggest auto company, outselling Toyota and General Motors this year. VW is also by far the industry leader in diesel car sales in the U.S. The German automaker last year sold 78,847 diesel passenger vehicles in the U.S., well ahead of its nearest competitor, according to online auto sales company TrueCar. Its corporate sibling Audi sold 15,732 vehicles during the same period.

Diesel vehicles made up about 3 percent of U.S. auto sales last year, similar to the share of hybrid cars. Many have viewed diesel as a promising green technology that could grow as the nation heads for more stringent fuel economy standards.