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VW Admits 'Defeat Device' Software in 11 Million Vehicles Worldwide
Volkswagen AG posted a statement Sept. 22 in which the company admits the software that evades EPA emissions standards for certain air pollutants, as EPA and the California Air Resources Board (CARB) alleged last week, is in "some eleven million vehicles worldwide." Both EPA and CARB have opened investigations, raising the possibility of significant fines, and VW's statement discloses how much money it has set aside to address the issue.
"Volkswagen is working at full speed to clarify irregularities concerning a particular software used in diesel engines. New vehicles from the Volkswagen Group with EU 6 diesel engines currently available in the European Union comply with legal requirements and environmental standards. The software in question does not affect handling, consumption or emissions. This gives clarity to customers and dealers," the corporate statement, which was not posted to the company's official Facebook or Twitter pages, says. "Further internal investigations conducted to date have established that the relevant engine management software is also installed in other Volkswagen Group vehicles with diesel engines. For the majority of these engines the software does not have any effect. Discrepancies relate to vehicles with Type EA 189 engines, involving some eleven million vehicles worldwide. A noticeable deviation between bench test results and actual road use was established solely for this type of engine. Volkswagen is working intensely to eliminate these deviations through technical measures. The company is therefore in contact with the relevant authorities and the German Federal Motor Transport Authority (KBA – Kraftfahrtbundesamt)," it continues.
"To cover the necessary service measures and other efforts to win back the trust of our customers, Volkswagen plans to set aside a provision of some 6.5 billion EUR recognized in the profit and loss statement in the third quarter of the current fiscal year. Due to the ongoing investigations the amounts estimated may be subject to revaluation. Earnings targets for the Group for 2015 will be adjusted accordingly," the statement says, adding "Volkswagen does not tolerate any kind of violation of laws whatsoever. It is and remains the top priority of the Board of Management to win back lost trust and to avert damage to our customers. The Group will inform the public on the further progress of the investigations constantly and transparently."
Converted to U.S. dollars, 6.5 billion euros is approximately $7.23 billion.
EPA issued a notice of violation of the Clean Air Act to Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc., alleging that four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015 include software that evades EPA emissions standards for certain air pollutants, and California separately issued an In-Use Compliance letter to Volkswagen. "Using a defeat device in cars to evade clean air standards is illegal and a threat to public health," said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "Working closely with the California Air Resources Board, EPA is committed to making sure that all automakers play by the same rules. EPA will continue to investigate these very serious matters."