Volkswagen's Troubles Are Growing, Not Getting Better

EPA cites 'defeat devices' in Audi and Porsche diesel engines

Porsche Cayenne SUV

Porsche Cayenne

Promotional image of the Porsche Cayenne. The 2015 Porsche Cayenne Diesel SUV was cited by the US EPA on November 2, 2015, as one of several Volkswagen-made vehicle models with 3.0 liter diesel engines that used software to cheat on emissions tests, showing lower emissions during official tests than the car actually produced when driving in standard usage. The citation marks a widening of the scandal that broke out in September 2015.Porsche USA

This hits just keep on coming for Volkswagen—though in this case, they're entirely self-inflicted. Earlier today, the U.S. Environmental Protection Agency (EPA) delivered a legalese-heavy letter to the U.S. headquarters of the carmaker in Virginia, helpfully notifying the company that the defeat devices installed in its diesel engines as a way of circumventing emissions testing aren't, in fact, limited to the 2.0-liter TDI variants found in its Jettas, Golfs, Beetles, Passats, and Audi A3's (as previously reported). Indeed, they extend to certain 3.0-liter V6 diesels, as well. Not a great Monday!

The vehicles using those engines in the United States number about 10,000—compared to the 482,000 of the smaller 2.0’s already known to be affected, and 11 million worldwide. But the finding smears more of the upscale brands under VW’s umbrella. Not only are the V6’s affected in the 2014 Volkswagen Touareg TDI (a pricey luxury SUV), they also show up in the 2015 Porsche Cayenne Diesel SUV, as well as in five 2016 Audi models (the A6, A8, and A8L TDI sedans; the A7 TDI hatchback; and the Q5 TDI sport crossover).

It’s clear that VW is going to have an epic uphill battle for years to come—the likes of which no modern corporation has ever seen.

The EPA, which presented the report during a press conference this morning alongside the California Air Resources Board, is continuing its investigation to see if other models and engines might have the devices—though they’re nearing the end of the sea of options. This covers most of the diesel engines in VW’s lineup. The EPA is testing other automakers as well, but has indicated that investigators have uncovered no additional evidence that other brands are using similar testing countermeasures.

On top of all this, a study from MIT and Harvard University released last week in the peer-reviewed journal Environmental Research found that the higher pollution emissions will directly contribute to nearly 60 premature deaths in the Unites States, along with thousands of cases on respiratory and cardiac stress. The study also suggested that the excess emissions will add $450 million in health expenses. But an additional $840 million and 130 lives could be spared if the recall is complete by the end of 2016.

Those are significant numbers, and these two developments combined mean that the brand tarnishing will continue unabated for the time being and that VW has been, evidently, less than forthcoming about which vehicles are affected. The immediate impact will be a stop-sale order on those additional vehicles by the EPA, and likely recalls for the already-sold cars to ensure they are compliant.

Throw in fines and lawsuits both here and in Europe, and it’s clear that VW is going to have an epic uphill battle for years to come—the likes of which no modern corporation has ever seen. The inside line suggests that the company will indeed survive, but it will cost it dearly, and the damage to its reputation will be commensurate with it financial hits. The company had already spent years trying to regain traction with largely indifferent consumers in the U.S. Now, though, it’s one step forward and 10 steps back ….