Dieselgate: The Volkswagen Emissions Scandal
Img src: SBS News
Let me ask you a question: How do you become the greatest at something? Dedication and hard work? What about lying and cheating? After all, none of us is without our sins. This article tells the story of a time when lying and cheating didn't exactly go well for a car company. This is about Volkswagen and their Emissions Scandal.
In 2006, Volkswagen set its eyes on becoming the leading car manufacturer in the world. Despite owning multiple big-name brands like Audi, Lamborghini, Bentley, Bugatti, Porsche, and Ducati, the majority of their sales were in Germany and China. Even though they made a net profit of $3.61 Billion in 2006 which was almost twice that of the previous year, Volkswagen lacked interest from potential consumers in America. It's not that they didn’t do business in the American market at all but compared to their sales in the European market.
At the time, there was a stigma surrounding diesel engines in the US. Diesel engines were generally regarded as noisy and used for industrial purposes. But on the other side of the Atlantic, the Europeans loved the diesel engine because of its higher mileage and ease of maintenance. As Europe was the biggest market for Volkswagen they had poured ridiculous amounts of money into making diesel engines more efficient. So, Volkswagen set out to break this stigma and establish diesel as the “default” fuel for American transport. Everything was going smooth for them until they encountered the strict laws the US legislation had mandated for vehicle emissions.
Unlike petrol, burning diesel produces Nitrogen Oxide as a byproduct when burned. Nitrogen Oxide is a very harmful pollutant so, devices called Nitrous Oxide Traps (NOx Traps) are placed in the exhaust system of diesel-powered vehicles which filter the Nitrous Oxide gas from releasing into the atmosphere. However, these NOx Traps function properly only when a small amount of unburned diesel is sent to them. Sending unburnt diesel to the NOx Trap results in lower mileage. And as Volkswagen had marketed their brand as the “efficient” diesel-powered vehicle makers, sending even a little amount of diesel to the exhaust would greatly reduce the mileage of the car which would ultimately result in them losing the grip they had.
To address the aforementioned issue, according to anonymous sources, an extremely confidential meeting was held in November 2006 where it was decided to implement a new engine management system that would “control emissions while testing.” This meant that cars would implement a system that found out if the car was being tested for emissions and restrict the engine to meet the federal legislations. Following the implementation of this system, Volkswagen started a huge marketing campaign stating their cars as the “clean” diesel engines and even stating their cars cleaner than the Toyota Prius which was a Hybrid. This marketing campaign proved extremely successful for Volkswagen. Finally, the sales of their cars increased in the US and the customers were satisfied with the mileage they got in their diesel cars.
But, the success Volkswagen had amassed in the American market was built on lies. No one suspected anything for the first five years. But this house of cards that they’d built on a foundation of lies started toppling when some students at the West Virginia University won a research grant of $70,000 and were tasked to test whether diesel cars produce more harmful emissions than standard petrol cars. Unfortunately for Volkswagen, the diesel car they chose to test was a Volkswagen Jetta. Upon testing, the two researchers were baffled by the amount of Nitrogen Oxide their car produced which had passed the Californian emissions test. It produced almost 35 times the legal limit which was absurd. The researchers then submitted their findings to the California Air Resources Board (CARB) which then filed an official inquiry against Volkswagen and asked VW to come clean on this act.
As soon as accusations started floating in 2015, Volkswagen started recalling diesel engines in the USA. On top of that, they also shredded thousands of incriminating documents which they later admitted to doing in court. And, on September 3rd, 2015 Volkswagen admitted to installing software that controlled emissions data to CARB and The Environmental Protection Agency. This caused their stocks to plummet from $38 per share to $25 per share. Additionally, the CEO at the time Martin Winterkorn resigned while still denying any wrongdoing.The following year, Volkswagen agreed to pay a $14.7 billion settlement in the US including compensation to the owners of diesel Volkswagen and Audi vehicles. At least $7 billion was spent buying back diesel vehicles from their respective owners which were reworked to sell but never sold the way they should’ve.
Needless to say, the emissions scandal has severely affected the environment because of the unnaturally high amounts of Nitrogen Oxide released into the atmosphere. Nitrogen Oxide is an extremely dangerous chemical as it affects the respiratory system of children and elderly people making them suffer asthma attacks more frequently and even causing asthma and other deadly diseases. This scandal has exposed the true extent a corporation can reach to satisfy its stockholders' pockets without even thinking about the world and the future.
Volkswagen has left a lot of waste behind to clean both in the atmosphere and also the countless cars that are now rusting in parking lots in huge numbers. The Corporation must be held accountable for all the problems they have caused and must be made to compensate for it.
Total Views: 0