By on November 12, 2015

Volkswagen Wolfsburg

The New York Times is reporting that a loophole in emissions regulations for European cars could keep Volkswagen from paying billions to governments for illegally polluting cars. Regulators considered closing the loophole in 2011, but ultimately failed to do so, which could leave the escape hatch ever-so cracked for Volkswagen to run through.

According to the report, which cites internal meeting notes of European regulators in Geneva, automakers can send through testing cars programmed for special circumstances that daily drivers can’t access.

“A manufacturer could specify a special setting that is not normally used for everyday driving,” British regulators warned in 2011, according to the New York Times.

Last week, Volkswagen chief Paul Willis sent a letter to British Parliament saying that Volkswagen would investigate whether the special mode that the EPA alleged Nov. 2 could allow bigger, V-6 engines to cheat emissions constituted a “defeat device” in Europe.

“I would now like to share with you that we have just received confirmation that the KBA does not regard the use of this technology in the EU as problematic and thus being in line with current regulation,” Willis wrote.

The Gray Lady says it better than I could:

Regulations that apply in Europe say “the settings of the engine and of the vehicle’s controls shall be those prescribed by the manufacturer.”

If manufacturers have the discretion to determine their own engine settings during emissions tests in Europe, it remains unclear if using software to alter engine settings would violate European rules.

The story correctly notes that all sorts of fun can happen in Europe when it comes to emissions tests: seats are taken out, body panels can be taped up, batteries are disconnected, and tires are usually over-inflated.

There is some doubt that Volkswagen could skate, however. In Britain, regulators said that cars must be tested in default modes or worst emission setting, and that those regulations were agreed upon with other European countries.

But Volkswagen could challenge that interpretation and who knows, avoid a few billion bucks in penalties?

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23 Comments on “Could Volkswagen Skate On A Technicality in Europe?...”


  • avatar
    olddavid

    We need to consider the roots of postwar VW when thinking of this corporation. It is a pseudo-governmental enterprise that has been operated with a unique combination of worker and family benefit as operating goals. After WWII, nobody wanted the bombed out remains, and as the red-headed stepchild it forged itself into the colossus it is today, with visions of world no.1 as a stated goal. I cannot imagine them being seriously crippled by this, but I used to argue to Farago that GM would never go bankrupt.

  • avatar
    George B

    I predict that Volkswagen and various European countries achieve the equivalent of a plea bargain where Volkswagen agrees to a ECU software update to pass the Euro 5 limits plus some fine. The test conditions are flexible enough and Euro 5 NOx limits are loose enough to allow a passing result with “creative” programming of engine behavior optimized for the test. There is plenty of precedent for bending the rules without using a “defeat device”.

    • 0 avatar
      APaGttH

      This. Exactly this.

      If VW were punished to the letter of the law, VW wouldn’t exist. As the second largest car maker in the world by a narrow margin, they are “too big to fail.”

      • 0 avatar
        CJinSD

        Will anyone ever grow tired of totalitarians’ obsession with draconian penalties? There’s something wrong with a penalty so big that it will never be used on anyone remotely capable of serving the scope of the sanction.

        • 0 avatar
          APaGttH

          Yes, why should be hold corporations to the same standards as persons, who regular are fined money they can never fine, given sentences that don’t fit the crime, and…

          Oh never mind, corporations may be “people” in the eye of the law but the heavy hand of the law shouldn’t dare touch a corporation when it commits malfeasance on an organized, industrial scale, over 7 years, globally, representing conservatively 12 million products representing the third largest financial decision of most people’s lives.

          Hey – no one died – directly *cough* *cough* *gasp *cough* – never mind this wasn’t incompetence but a willful decision to break the laws of multiple nations giving an artificial competitive advantage, a pricing advantage, a hard cost advantage, and the benefits of tax credits and corporate welfare. But as others pointed out, no one dies in a robbery, or a rape, or an assault so meh, who cares…

          • 0 avatar
            CJinSD

            I don’t think you got the point. Corporations should be ruled by laws, but they should be laws created by people sentient enough to live in the real world. These are penalties that only a few entities could ever fulfill, and those very entities will never have to fulfill them for the same reason that they can.

        • 0 avatar
          carguy

          @CJinSD: No one seems to mind these draconian punishments when it comes to individuals. I see little protest when it comes to ruining a life with lengthy prison sentences for an infraction of the law. So why should corporations not be held to the same standard?

  • avatar
    heavy handle

    That answers the question I asked a few weeks back: do we know for sure that what VW did infringed EU laws?
    The answer is: No, we do not.

    They broke people’s trust and hurt a lot of feelings, but EU emissions regs are loose enough that they may not have broken any laws.

  • avatar
    Pch101

    The entire initiative seems to have been engineered around US specs, and ultimately violated US law because defeat devices are illegal here.

    Nothing thus far seems to indicate that EU laws were broken. There is a legal difference between gaming the tests (which is legal) and violating laws related to the tests (which obviously isn’t legal by definition.)

    If the EU tests do a poor job of reducing real world NOx levels, then the problem is with the test. The ICCT and others have been griping about EU testing regimes for years.

  • avatar
    APaGttH

    *cough*

    Too big to fail.

    *cough*

    *cough*

  • avatar
    Lou_BC

    VW and GM – “too big to fail”

    We must be wary of companies with short business acronyms.

    When do we add FCA to the list ;)

    • 0 avatar
      APaGttH

      Chrysler was already too big to fail – lets not forget that Chrysler was bailed out by the government – twice (1978). If FCA didn’t have Jeep – it would be pretty darn ugly right now.

      Nissan for all intent and purposes was bankrupt in 1999 – regardless of their artificial vanilla flavored gee I don’t care and I have shaky credit product line up today, it has been quite the turn around.

      • 0 avatar
        Robert.Walter

        If the financial corpse of Chrysler hadn’t owned Jeep, Fiat wouldn’t have made its Hail Mary pass to the USG and bankruptcy court.

        • 0 avatar
          Scoutdude

          It wasn’t a Hail Mary pass on Fiat’s part it was a Hail Mary pass on the part of the US gov’t to find someone, anyone who would take the mess off of their hands. I do agree that without Jeep it wouldn’t have happened because that was the prize. Daimler tried to unload the rest of the mess that was Chrysler for many years and when potential suitors found out it only included the cars they said no way. When they added Dodge trucks to the deal everyone still said no way. It was only when the included Jeep that they found a sucker.

        • 0 avatar
          Pch101

          Marchionne wanted US market share, a North American production base and a US distribution network. The brands were secondary. He probably would have happily taken GM instead of or in addition to Chrysler if he had the resources to do the deal, but he didn’t.

  • avatar
    SCE to AUX

    Even if VW beats the legal rap, they’ll still have to face the lawyers representing angry consumers whose cars have lost value, or don’t run the same way after the TBD fix.

    For an illustration, remember that OJ Simpson isn’t a murderer, either.

  • avatar
    Sigivald

    As I always point out, “loophole” means “deliberate feature of the rules of which the speaker disapproves”.

  • avatar
    wmba

    Can anyone here with at least a partial brain tell me how taping over body shut lines helps fuel economy on a rolling road dynamometer in a room?

    No you cannot, because it’s obviously a stupid notion!

    I cannot believe that the nitwits at NYT or the Economist who like to repeat old wives’ tales like this have the faintest clue what they’re nattering on about. Sorry.

    I once again post below how these tests are conducted in the UK at a properly accredited facility.

    http://www.smmt.co.uk/2014/09/myth-busting-nedc-fuel-consumption-test-cycle/

    What’s left unsaid is that a fully-charged battery can be inserted to prevent the alternator from waking up. What’s also left unsaid is that the test itself was designed in 1975.

    If the Germans employed ADAC or some other outfit known to accept bribes, then I still question the sanity of taping mirrors and doors, but can believe they pumped up the tires for filthy lucre. After all they do fake testing of Indian and Chinese cars for that master of propriety and good taste, Max Mosley, who runs Global ECE for profit motive.

    Years of reading the Economist and NYT have not given me one bit of confidence that they have any knowledge of the car industry at all, beyond broad brush strokes. Bloomberg is even worse. These are johnny-come-lately outfits who assign cub reporters/interns to come up with just words and no understanding.

    • 0 avatar
      Pch101

      http://www.transportenvironment.org/sites/te/files/publications/Real%20World%20Fuel%20Consumption%20v15_final.pdf

      Happy reading.

    • 0 avatar
      Nick Engineer

      I haven’t found Bloomberg to be wrong or clueless in their reporting. Maybe I need to pay more attention.

      IIRC the euro test has to start off with a road test and certain data from it is used as parameters for the lab test. So taping up body gaps during the road test makes the lab test run with parameters suitable for a more aerodynamic car than the one being tested.

      Door gaps and other such feature cause the air to separate from the body surfaces creates turbulence.

    • 0 avatar
      Scoutdude

      Yes Nick you are correct as PCH posted the way they figure out the load the dyno will put on the vehicle is by on road testing to determine the aero and mechanical drag.

      So wmba, that is how taping seems and other aero tricks are used to cheat the Euro tests.

      The EPA tests also make use of on-road “coast down” to determing the drag setting for the dyno testing. Making a “mistake” in calculating/setting the dyno drag is how Hyundia/Kia gamed their US tests which they were caught at.

      Ford used that Fusion Hybrid’s on-road and dyno testing to set the C-Max MPG which while misleading was fully legal because the weights are close and they have the same power train. Unfortunately the aero drag of a wagon is much more than of a sedan.

  • avatar

    German Wirtschaftswoche reports that whistle blowers in Europe, frustrated that the EU did not undertake any action after it was brought to their attention in 2011 already, that the tests were being rigged, decided to notify ICCT, the International Council on Clean Transportation. From there on it landed on the EPA’s desk.

  • avatar
    samuelmorse

    Nothing new here. It was already said from the beginning that while US regulations are explicit in prohibiting test cheating devices, that’s not the case in Europe. In fact, not only VW but all car manufacturers contemplate the so called “optimizing fuel consumption and emissions parameters under homologation test procedures” protocol. That simply means that engine electronics are mapping to minimize consumption and emissions in test mode, and that is well known by regulators and of course legal. Given the scandal created by VW in USA, it is clear that EU will change into more stringent test regulations, and this has already been confirmed, but so far VW will save a lot of pain in Europe thanks to this.


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