Volkswagen Could Face Millions More In Fines For CAFE Fuel Credit Penalties
Massachusetts Sen. Edward Markey on Thursday sent a letter to the National Highway Traffic Safety Administration asking the agency to re-evaluate millions of fuel economy credits awarded to the automaker by the agency for cheating diesel cars.
The letter, which was addressed to Administrator Mark Rosekind, outlined the automaker’s exceedingly fuel efficient fleet average from 2008, which now could be in jeopardy after the automaker admitted it cheated emissions tests and could impact those cars’ mileage.
“We’ve since learned that the term ‘clean diesel engine’ appears to have been an oxymoron when used to describe VW’s fleet. Some analyses have even concluded that the deaths of dozens of people may have been caused by the illegal air pollutant emissions VW’s defeat devices enabled,” Markey wrote.
The Detroit News first reported on Markey’s letter.
If rescinded, Volkswagen’s credits, which are fewer than many other automakers including General Motors, Toyota and even Subaru, wouldn’t be available to the automaker to trade for less-efficient future cars.
According to rules outlined by the Corporate Average Fuel Economy standards, automakers are awarded credits by exceeding increasingly difficult fuel economy averages, and those credits are multiplied by the number of cars sold. Volkswagen earned roughly 34 million credits for its cars — not all diesel models — between 2008 and 2012. In comparison, Honda has roughly 100 million credits for its cars over the same time period and Toyota has roughly 470 million credits.
Automakers can hold those credits, apply them to future cars or sell them to other automakers. It’s not immediately clear if Volkswagen sold any of its credits to any other automaker.
Officials from NHTSA, the office of Sen. Markey nor Volkswagen commented on this story.
Between 2008-2011, Porsche North America paid more than $8 million in fines to CAFE for its cars’ non-compliance with newer CAFE regulations.
In Markey’s letter, the senator outlines Volkswagen’s defiance when new average fuel economy regulations were announced for 2017 and beyond, saying “VW was one of the only automobile manufacturers that opposed them, in part, because it felt that the new plan was ‘unfair’ to makers of clean diesel engines.
“In light of VW’s illegal use of defeat devices to circumvent emissions controls, it is my belief that NHTSA should immediately re-analyze and, as appropriate, reverse any CAFE benefits VW might have enjoyed as a result of illegal behavior,” Markey added.
Since CAFE was enacted by Congress in 1975, NHTSA has collected more than $873 million in fines from automakers. Volkswagen of America has never been fined for violating CAFE standards with its cars. In 2007, the brand was fined $4.5 million for violating CAFE standards with its light trucks, such as its Touareg.
Markey asked NHTSA to re-evaluate the automaker’s over-compliance, and if the agency had any plans to penalize the automaker further.
“If no such actions are planned, why not?” Markey asked in the letter.
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VW is building capacity it very arguably doesn't need while pruning investment in new products and tech that it clearly does need. Well, whatever Asian transplant winds up w/ the facility, they're apt to get a bargain price. The German union will be happy. btw, this tiny local dealer, must be feeling better: March 2015 NEW MILFORD, CT-- After serving their customers for more than six decades, the owners of New Milford Volkswagen, one of the oldest Volkswagen dealerships in the U.S., will close at the end of the month. Ted Orr, the dealership's owner, said customers have been coming into the shop and calling all week after rumors of the closure began circulating through town. "A lot of our customers, many of whom have bought cars from us for generations, have been very saddened by the news," Orr said. He explained that while the dealership is still healthy financially with less than $20,000 in debt on its books, Volkswagen revoked Orr's line of credit on concerns the dealership could default on its payments after three years of failing to turn a profit. "Because they've revoked our credit, we can't buy cars," he said. "If we can't buy cars, then we can't sell them." Orr said Volkswagen sales have been suffering in recent years because its product mix and marketing haven't kept up with competing brands. He noted that sales in New England dropped nearly 30 percent last year, in part because of weak sales of the brand's all-wheel drive offerings including the Touareg and the Tiguan -- an important option in snowy climates. Volkswagen's U.S. sales fell 5.2 in February, the company reported Tuesday, as gains for the redesigned Golf failed to offset declines of all other VW models. Erick Swindell, a New Milford resident, said Tuesday that he was "devastated" by the news. He and his wife have purchased 10 vehicles at the dealership since 1997. "New Milford Volkswagen has the best people and service that I've ever encountered," Swindell said. "They've always treated us like friends of the family. I can't believe that Volkswagen is allowing a dealership that does right by its customers to go away. Frankly, I am mad at Volkswagen." The New Milford location first opened its doors in 1950, less than a year after Volkswagen started selling cars in the U.S. While Gensinger Volkswagen in New Jersey also opened in 1950 and claims to be the oldest dealership in the country, Orr notes that New Milford Volkswagen is still operating out of the original building that's been used for 65 years to sell the nameplate.
I keep posting the same things surrounding these stories. In the interest of brevity, I'm just going to start posting the following: VW is screwed. Possibly to the point of not surviving.