Emissions scandals thread

[Touring Mars]

VW is setting aside 7B for the problem (they make 12B per year). There are 11 million cars affected, which puts the fix at less than $1000 per car. I think they'll need $5000 per car, which would be $55B, which is almost 5 years of profit. This company could go under.

And that is just to fix the problem with the cars in the US. They could also face a fine for every affected car sold in the US, totalling ~$18bn, and then you also have the possible lawsuits from people who want their money back across the world, which will mean alot more than $5000 per car.

VW could be very lucky insomuch as they are 'too big to fail' and they are based in Germany. Angela Merkel will probably ensure that they survive... maybe they will be taken over by the state, taken under the wing of a strong German leader at a time when Germany is dominant in Europe, and renamed something like 'The People's Car', only in German? Oh wait...

 

[bremics]

Screwing over emissions laws and the environment in order to boost profits? Please, China will be sat at home thinking 'do we own VW?'

Apparently China has recently gone on a huge environment trip and something like 30% of cars sold have to be hybrid and such.

Volkswagen is apparently huge there in terms of sales and apparently possibly the biggest polluter now.

Or maybe not?

http://mobile.nytimes.com/2015/09/2...ct-on-china-its-largest-market.html?referrer=

I guess they're lucky there diesel push absolutely failed in China.

 

[Anthony]

VW will offer financing reimbursement to dealers for the TDI cars they can no longer sell.

http://www.roadandtrack.com/new-car...ers-for-tdi-vehicles-they-can-no-longer-sell/

I guess this pretty much guarantees that the new generation 2.0TDI uses illegal software to circumvent the EPA as well.

 

[NLxAROSA]

The Guardian posted an article about what this means in terms of NOx emissions. For the US, only a small percentage of cars is affected since hardly anyone (relatively) drives a diesel, but in the EU it's a different story. Environmental organizations over here are going to be all over this, as well as the EU. This is going to turn even nastier for VW.

 

[Crash]

Since when did Bill Belichick become the CEO of Volkswagen?


Joking aside, I'm not surprised that companies are trying to game the system, but I'm surprised at the scale and the brazenness of this. With this scandal in full swing, VW has pulled all the TDI models and virtually all mentions of TDI off their US website. You can now only look at and spec the gasoline models.

 

[Pseudopod]

So electricity and manufacturing of Li-ion batteries produces 0 emissions?

Do production emissions for ICE cars also count towards their total emissions? What about the emissions for moving gas to service stations, do they count that?

 

[eran0004]

It would be interesting to know who knew about this. I'm not so sure the company knew about it themselves. The demand for low-emission engines is not only placed on the company, but also on departments and individuals within the company, so it's not at all certain that the company was aware of this.

 

[Pseudopod]

I'm sure they "didn't know about it" the exact same way that Blatter didn't know about the FIFA bribes.

 

[Liquid]

There have been worse black marks in Volkswagen's illustrious history. Stealing Tatra's intellectual property and all that.

 

[Tired Tyres]

Really? Stealing Tatra's intellectual property hasn't killed anyone has it? Diesel emissions cause cancer according to the World Health Organisation. That kills people.

 

[Touring Mars]

The Guardian posted an article about what this means in terms of NOx emissions. For the US, only a small percentage of cars is affected since hardly anyone (relatively) drives a diesel, but in the EU it's a different story. Environmental organizations over here are going to be all over this, as well as the EU. This is going to turn even nastier for VW.

Yes, you don't need to be an environmentalist to see the scale and nature of the problem VW is facing. But for people who are concerned about their impact on the environment - including millions of VW's own customers - it is both depressing and worrying that a company of VW's stature is willing to do the exact opposite of what it professes to do i.e. sell cars that emit illegal levels of dangerous pollutants as if they are clean.

Also, class action lawsuits against VW on behalf of consumers have already started: http://www.theguardian.com/business...-live-updates#block-560263f8e4b0da121189d9e5;

 

[Liquid]

Really? Stealing Tatra's intellectual property hasn't killed anyone has it? Diesel emissions cause cancer according to the World Health Organisation. That kills people.

Given that it was part, and I stress a part, of the pretext for the German invasion of Czechoslovakia, I'd say it also had a hand in the deaths of people. Notwithstanding the slave labour which worked in VW factories during the war.

However, this emissions scandal? It's difficult to imagine the magnitude of what has happened, or what has been 'allowed to happen', but I did see this snippet from the Grauniad:

Part of me wonders though, had Volkswagen posted honest emissions figures all these years, would it have affected their sales that much? In that event, the 'increase' in pollution noted above wouldn't exist and it wouldn't have been perceived as a problem. Or as much of a problem.

Edit: I don't know how it works in the States (or the states). Are cars taxed according to emissions? Because this puts a lot of spanners in the works.

 

[Robin]

The German government knew about VW's test rigging.
(Alleged by an opposition party)

http://www.telegraph.co.uk/finance/...wer-as-VW-emissions-fallout-deepens-LIVE.html

The German Green Party claimed Angela Merkel’s government admitted that it knew about VW’s test rigging software in an answer to a parliamentary question in July.

“The government told us in July that it knew about this software, which has been used in the USA, and it’s clear they knew the software was widely in use,” Oliver Krischer, the deputy leader of the Greens told N24 television.

“The government worked with the auto industry, not to see that emissions levels were reduced, but so that the measuring system was set up to allow the cars meet the necessary standards on paper,” Mr Krischer alleged.

Alexander Dobrind, the transport minister, has denied the government failed to monitor the car industry and has already ordered an inquiry into the VW scandal.

Potential state sponsored illegal activity made public... oh boy.

My worst case prediction for this is VW enters administration, all other group marques are spun off into independent companies and the state takes control of the remaining VW arm where it will probably reduce the range drastically and discontinue TDI all together.

 

[catamount39]

The German government knew about VW's test rigging.
(Alleged by an opposition party)

http://www.telegraph.co.uk/finance/...wer-as-VW-emissions-fallout-deepens-LIVE.html



Potential state sponsored illegal activity made public... oh boy.

My worst case prediction for this is VW enters administration, all other group marques are spun off into independent companies and the state takes control of the remaining VW arm where it will probably reduce the range drastically and discontinue TDI all together.

That'd be something, Audi, Lamborghini, Bentley, Skoda and Porsche all becoming independent? That'd be something, how many years has it been since they were all independent? Oh God...this could be very bad for the LMP1 teams.

 

[kikie]

Wonder which car brand is going to be next.

Euro 6 is the norm. VW diesel are up to 40 times more pollutant. This means that brand new VW diesels are not euro 6. Selling a new euro 6 car which is not a euro 6 is probably illegal.

 

[AudiMan2011]

That'd be something, Audi, Lamborghini, Bentley, Skoda and Porsche all becoming independent? That'd be something, how many years has it been since they were all independent? Oh God...this could be very bad for the LMP1 teams.

Not just LMP, it could have huge ramifications for VAG's entire motorsport divisions.

 

[Dennisch]

Demand for diesel wil drop like madness. Diesel price goes down. I have at the moment a dieseling Berlingo at my disposal.

I'm fine with this.

 

[Stotty]

My worst case prediction for this is VW enters administration, all other group marques are spun off into independent companies and the state takes control of the remaining VW arm where it will probably reduce the range drastically and discontinue TDI all together.

How big do you think the penalty would need to be to force this outcome?

VAG have €20bn in cash and made €10bn after tax in 2014. 87% of their stock is controlled by only 3 investors, and the group itself has full control over 50% of the voting rights. They have 500k employees.

It's going to be painful short-term, but they will be fine in the medium/long-term.

 

[Robin]

I'm pretty sure they can also kiss their F1 entry goodbye.

In Europe 50% of cars sold are Diesels, it could kill off the entire industry.

How big do you think the penalty would need to be to force this outcome?

VAG have €20bn in cash and made €10bn after tax in 2014. 87% of their stock is controlled by only 3 investors, and the group itself has full control over 50% of the voting rights. They have 500k employees.

It's going to be painful short-term, but they will be fine in the medium/long-term.

There is already talk about those investors pulling out which would leave them a sitting duck. The problem is we don't know how much the civil lawsuits are going to cost which could be Billions. The fine is 18 bn max, the lawsuits could be a couple of bn and the recall could be untold bn's.

Also it's not so much the money, it's also the reputation which can put them under. Even with all the money in the world we have seen companies shut shop because of bad press. What's the point of keeping the operation running with zero sales.

 

[Dennisch]

I'm pretty sure they can also kiss their F1 entry goodbye.

In Europe 50% of cars sold are Diesels, it could kill off the entire industry.

If Europe can find anything wrong in their measurements. If they do though, you might be right that it could spell the end of diesel powered VAG products. Or at least a massive increase in development.

 

[Legro]

The German government knew about VW's test rigging.
(Alleged by an opposition party)

http://www.telegraph.co.uk/finance/...wer-as-VW-emissions-fallout-deepens-LIVE.html



Potential state sponsored illegal activity made public... oh boy.

I can't stop thinking that if VAG has been allowed to do it, what have BMW and Daimler done.

My worst case prediction for this is VW enters administration, all other group marques are spun off into independent companies and the state takes control of the remaining VW arm where it will probably reduce the range drastically and discontinue TDI all together.

If this'll really happen and Volkswagen goes for the German government, Audi will likely go with them. The high end brands like Lamborghini and Bugatti, will probably die, if not in the actual administration, to the simple lack of funds. And unless Skoda, Seat, and Bentley decide to form some sort of Volkswagen-less VAG and they can cover the marketing problem caused by the former TDi name and manufacturing loss of their Volkswagen sourced diesels (no way they'd keep them after this), they'll probably go down too.

Not to mention the more than plausible dive down in the entire German economy, which of course means a massive recession in the whole EU.

 

[Joel]

Really curious to see how this all plays out, my mom got a Golf TDI in 2011 so I'm watching this pretty closely. Beyond the fines it seems like something we could see big class action lawsuits over. Such a shame, the engine is fantastic with great performance and hilariously good fuel economy,but I can't imagine that will remain the case if they have to change the software.

 

[Liquid]

That'd be something, Audi, Lamborghini, Bentley, Skoda and Porsche all becoming independent?

I wonder whether these brands could sustain themselves if they became independence. If the worst case scenario of VW fracturing and breaking up was to come true, I'd imagine that their interdependence on one another means that each brand couldn't carry on. Not in their current guises at least. Except Audi and Porsche, maybe.

 

[NLxAROSA]

It's going to be painful short-term, but they will be fine in the medium/long-term.

It's hard to predict of course, but the stakes are so high for Germany/EU that there's probably going to be a settlement in one form or the other (at least in EU, not sure about US). I'll assume this settlement will be a lot lower than the actual maximum sanctions. But if 'too big to fail' is an argument, then splitting VAG up could be one of the terms of a settlement.

 

[Stotty]

I can't stop thinking that if VAG has been allowed to do it, what have BMW and Daimler done.
If this'll really happen and Volkswagen goes for the German government, Audi will likely go with them. The high end brands like Lamborghini and Bugatti, will probably die, if not in the actual administration, to the simple lack of funds. And unless Skoda, Seat, and Bentley decide to form some sort of Volkswagen-less VAG and they can cover the marketing problem caused by the former TDi name and manufacturing loss of their Volkswagen sourced diesels (no way they'd keep them after this), they'll probably go down too.

Not to mention the more than plausible dive down in the entire German economy, which of course means a massive recession in the whole EU.

The German Government will never let that happen... not only for the economic impact, but for the potential loss of jobs. Plus VAG manufacture in over 20 countries, and all of these will want to protect the jobs.

Although it's somewhat fun to be ghoulish, and ponder doomsday scenarios, a political solution will be found.

 

[catamount39]

I wonder whether these brands could sustain themselves if they became independence. If the worst case scenario of VW fracturing and breaking up was to come true, I'd imagine that their interdependence on one another means that each brand couldn't carry on. Not in their current guises at least. Except Audi and Porsche, maybe.

Audi and Porsche probably could be okay, since Porsche seemingly acts on it's own and Audi is what most of the other cars in VWAG are based upon (engine and chassis sometimes) Lamborghini is a strange one, they might be alright, they might not. It's been about like 16-17 years since they were loners. Skoda...no idea. Bentley could be in big trouble.

These are just guesses...this could all end up badly.

 

[VXR]

Interesting the German government have been implicated. Aren't the big 3 Euro players including France and Britain certain to be fined for not getting their emissions to a set level by 2020? This could be huge.

 

[Tired Tyres]

Audi and Porsche probably could be okay, since Porsche seemingly acts on it's own and Audi is what most of the other cars in VWAG are based upon (engine and chassis sometimes) Lamborghini is a strange one, they might be alright, they might not. It's been about like 16-17 years since they were loners. Skoda...no idea. Bentley could be in big trouble.

These are just guesses...this could all end up badly.

Audi use the same Diesel tech as VW? What about Skoda? Do they? They could all be in big trouble. It is called VAG after all.

 

[Touring Mars]

Yes, the paddle shop near 🤬 Creek will be doing a roaring trade methinks.

 

[SVPSkins]

always said TDI cars were sin full