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Volkswagen releases initial results of emission investigation

11 December 2015

Volkswagen provided initial results of its investigation on the NOx and CO2 emission testing irregularities. The investigation—coordinated by a special committee of the Volkswagen Supervisory Board—is conducted by approximately 450 internal and external experts. Following the internal review, VW Group Audit will provide its findings to the external experts of Jones Day, an internationally respected law firm, to “clarify the facts and responsibilities” and to conduct a forensic investigation with operational support by the audit firm Deloitte.

The first findings in the investigation of the NOx emission issue indicate that the software influenced NOx emissions behavior was due to the interaction of three factors: misconduct of individual employees, weaknesses in some processes, and “a mindset in some areas of the Company that tolerated breaches of rules”. Based on the Group Audit’s findings, Volkswagen has decided that its testing practice must undergo comprehensive changes. In the future, emission test will be evaluated externally and independently. In addition, randomly selected real-life tests will be introduced to assess emissions behavior on the road.

The starting point for the NOx emission issue was a strategic decision to launch a large-scale promotion of diesel vehicles in the United States in 2005. Initially, it proved impossible for the EA 189 engine (with NOx adsorber aftertreatment) to meet the US NOx emission requirements by legal means within the required timeframe and budget. This led to the incorporation of software that adjusted NOx emission levels according to whether vehicles were on the road or being tested. Later, when urea-SCR technology became available to reduce NOx, it was not employed to the full extent possible. On the contrary, the software in question allowed urea (AdBlue, DEF) to be injected in variable amounts, such that the NOx values were low when vehicles were in the test bay, but significantly higher when vehicles were on the road.

Volkswagen will conduct a recall of the affected European variants of the EA 189 engine, using technical solutions that have been “positively evaluated” by the German Federal Motor Transport Authority (Kraftfahrtbundesamt, KBA). The costs of implementing these solutions will be manageable in technical, manufacturing, and financial terms. The recall involves a software update in the 2.0 and 1.2 liter TDI engines. For the 1.6 liter TDI, a “flow transformer” will be used that increases the measurement precision and, in combination with redesigned software, will “optimize injection quantity”—said Volkswagen. This suggests that the fuel injection system in the 1.6 liter engine is not adequate to ensure the NOx adsorber regeneration at all operating conditions.

The recall of the highest-volume variant, the 2.0 liter TDI, will begin in January 2016. The recall of the 1.2 liter TDI is scheduled to begin in the second quarter of 2016. The implementation phase for the 1.6 liter models is planned to begin in the third quarter to allow time to prepare for the hardware modification. Under the current plan, the entire initiative will take at least all of calendar year 2016. The recall will be implemented free of charge to vehicle owners, said Volkswagen.

Due to the stricter NOx limits in the United States, it is a greater technical challenge to retrofit the vehicles such that all applicable emissions limits can be met with one and the same emissions strategy, said Volkswagen. The solution designed for North America will be presented when it is approved by the US Environmental Protection Agency (EPA) and the California Air Resources Board (ARB).

The number of Volkswagen Group vehicles potentially affected by the recall amounts to about 8.5 million in Europe (EU28), including 2.4 million in Germany, and about 0.5 million in the USA and Canada. Under a KBA decision, the recall will be mandatory in Germany. A mandatory recall is also likely in some other European countries, as well as in the United States, where the VW software strategy has been declared illegal by the US EPA and the California ARB. However, the actual number of vehicle upgrades may be significantly smaller. Many VW owners will be reluctant to complete the recall, as the emission upgrades would result in increased fuel consumption and might negatively impact vehicle performance. The affected jurisdictions, both in Europe and in North America, often lack the authority and/or enforcement mechanisms to force vehicle owners to complete the upgrades, even if the recall is mandatory for Volkswagen. In the USA, only California and a couple of other states can enforce the recall through the vehicle license plate renewal system.

In a separate statement, Volkswagen announced that the irregularities in CO2 testing affect significantly fewer vehicles than originally suspected. An internal VW investigation revealed that only about 36,000 vehicles are affected, compared to the 800,000 that were originally suspected. The deviations found in the figures for nine model variants amount to a few grams of CO2 on average, corresponding to increased NEDC fuel consumption of 0.1 to 0.2 L/100 km.

Against this background, the negative impact on earnings of €2 billion that was originally expected has not been confirmed, said the company.

Source: Volkswagen