Volkswagen Pulled Cheap $51.35 Million Bar Trick in 2009 Based on False Emissions Data
According to the LA Times, Volkswagen’s falsified emissions data made certain 2009 model year vehicles eligible for a $1,300 green car subsidy. That subsidy, applicable to 39,500 Jetta and Jetta Sportwagen units sold, equated to a total of $51.35 million available to buyers from the government.
The LA Times used Internal Revenue Service data and Motor Intelligence, an automotive industry research body, to calculate the numbers.
The $51 million in total tax credits is just another case of automakers leveraging dumb government money to incentivize consumers to buy their vehicles.
A few points of note in the LA Times piece:
“It is really unfortunate,” said Luke Tonachel, director of clean vehicles and fuels project at the Natural Resources Defense Council. “The government has been effective to help advance clean technologies, but it is a waste of taxpayer dollars when they aren’t actually helping to clean the environment.”
The Volkswagen diesels qualified for the federal incentives in the same year the automaker first installed the software trick it used to cheat on emissions tests.
This is likely not the first case of Volkswagen (or automakers in general) taking money for green initiatives and cutting a corner or two along the way, but it feels like a cheap bar trick where a perpetrator asks an unsuspecting patron if he’s willing to make a $20 bet on whether he can get all the water out of a glass without touching it, or something.
The problem is this time it’s the government asking, “Hey, does anyone have any cheap bar tricks to show me?”
Volkswagen certainly does.
I said it with the GM ignition scandal and I will say it with the VW diesel scandal. They are not the only ones cheating to meet regulations (be it emissions, or otherwise). They are the ones who got caught, just like GM. Remember, in business, like sports.....if you aren't cheating your aren't trying hard enough. Every one of our favorite automakers has probably multiple skeletons waiting to burst out of the closet under the right circumstances. You don't sell millions of consumer products subjects to volumes of regulations worldwide which travel at high speed alongside millions of other consumer products piloted in part by complete morons without cracking a few eggs in the process.
Hey, I got that tax credit in 2009! Then due to a crazy but in retrospect somewhat familiar-sounding software issue, VW ended up letting me trade my car for a 2010 model so I took the tax credit again the next year. The tax credits probably paid for the cost of the out-of-warranty repairs that might have otherwise turned me into a non-VW customer for life. Wolfsburg, I'm still here for you. I love the way you, as our favorite car dealers like to say, are willing to do what it takes to earn my business. But just to be clear: this tax credit was, like Cash for Clunkers, a Great Recession era economy boosting program primarily about fuel efficiency, not emissions (technically it was known as the "lean burn" tax credit). I'm pretty sure it applied to Prius buyers as well. So I'm not sure what people are complaining about exactly. At the time, the EPA fuel economy ratings of the 2.0 liter TDI were said to be understated from real-world numbers (VW tried to use other numbers in their advertising, remember?). Maybe now we know the car's awesome software had something to do with that? I understand the bitterness flying toward VW from all directions right now, but I don't think they did anything wrong in this case.
Don't be surprised if shareholders conclude that it is best when Porsche, Bugatti and Bentley will no longer be associated with VW diesels. PS: "incentivize"?... I guess one is never too old to learn.
Four little letters - R-I-C-O - let the federal government take everything. Everything. Down to the last penny and paper clip.