Volkswagen faces massive US fines and recalls from EPA

VW has reported to cut costs across all of its 12 brands in the wake of the emissions scandal - image courtesy of Volkswagen AG
The iconic VW Beetle was one of the vehicles involved in this EPA investigation. Image courtesy of Volkswagen AG

German automaker Volkswagen AG (VW) is facing billions of dollars of fines following revelations that the company allegedly attempted to cheat on emissions tests.

Last week, following months of investigations, the company faced allegations that it used special software within several of its popular models in order to present false emissions readings during tests.

Specifically, the US Environmental Protection Agency (EPA) found that VW had installed a “defeat device”, in its diesel cars including the Audi A3, VW Jetta, Beetle, Golf and Passat models.

This device would reportedly detect when the car was under laboratory tests for nitrous oxide emissions, and run an alternative engine cycle, making these engines appear many times cleaner than in reality.

As a result of this investigation, VW has been ordered to recall the vehicles which were implementing this software, a number which is expected to reach upwards of 480,000 cars.

In addition to the massive cost of this recall, VW stands to be fined around $37,500 per vehicle for the violations, meaning the company could face up $18bn in penalties. As well, there could also be possible criminal charges for certain VW executives.

VW has today put out a statement apologizing for their actions.

“The Board of Management at Volkswagen AG takes these findings very seriously. I personally am deeply sorry that we have broken the trust of our customers and the public,” said Prof. Dr. Martin Winterkorn, CEO of Volkswagen AG.

The company has also promised to cooperate with the investigation into any wrongdoing on their behalf.

“We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter,” Winterkorn continued.

Despite the seriousness of the allegations, VW has been granted a “reasonable amount of time” to complete repairs associated with its recall according to the EPA.

Volkswagen’s share price has been severely affected by these allegations with shares down at least 18% in trading on Monday.

Update – Law firm Hagens Berman launches suit

National consumer-rights law firm, Hagens Berman, filed a class-action lawsuit against Volkswagen’s US manufacturer and distributor, and is continuing to expand its national suit alleging that the automaker deceived consumers by using software to cheat emissions tests, allowing its “CleanDiesel” vehicles to emit nitrogen oxides (NOx) at levels 40 times higher than legal limits during normal use.

In the suit filed Sept. 18, 2015 – the first filed against VW regarding its use of fraudulent software – an owner of a CleanDiesel Volkswagen accused Volkswagen Group of America of fraudulent concealment, false advertising and violations of federal and state laws. Hagens Berman has filed another lawsuit with clients from more than 20 states on Monday, Sept. 21, 2015, and expects to have cases on file for every state by the end of this week. The firm expects to have representatives from all states following an unprecedented response from the first filed complaint.

After receiving over a thousand inquiries from outraged owners of VW and Audi “CleanDiesel” cars, the firm is continuing to expand its lawsuit and is seeking information from affected owners in all 50 states.

According to the EPA, Volkswagen installed its deceptive software, called a “defeat device,” in at least the following diesel models of its vehicles: Jetta (model years 2009 – 2015), Beetle (model years 2009 – 2015), Audi A3 (model years 2009 – 2015), Golf (model years 2009 – 2015) and Passat (model years 2014 – 2015).