VW rocked by the emissions scandal
BERLIN — Volkswagen, the world’s top-selling automaker, lost a stunning 17.1 percent of its value Monday after admitting that it intentionally rigged nearly half a million cars to defeat U.S. smog tests.
The Obama administration, meanwhile, announced it is expanding its investigation of what it’s calling “defeat devices” in diesel vehicles, to make sure other manufacturers aren’t using similar schemes to thwart federal Clean Air laws.
Volkswagen has now admitted that it intentionally installed software programmed to switch engines to a cleaner mode during official emissions testing. The software then switches off again, enabling cars to drive more powerfully on the road while emitting as much as 40 times the legal pollution limit.
The U.S. Environmental Protection Agency is working closely with the California Air Resources Board, which spent years pressing Volkswagen to explain why its diesel engines ran dirtier in actual driving than during smog tests.
“VW did not self-disclose these issues,” said EPA spokeswoman Liz Purchia said.
VW, facing as much as $18 billion in fines, halted U.S. sales of the affected vehicles and pledged to cooperate with regulators after finally acknowledging its scheme on Sept. 3, Purchia said.
The investigation also could test the Justice Department’s resolve, announced Sept. 9, to hold individual executives accountable for corporate wrongdoing. Purchia said the Justice Department is already involved, and a VW official confirmed that the Department has contacted the company. The official spoke on condition of anonymity for lack of authorization to discuss the matter publicly.
The EPA warned VW Friday that in addition to corporate fines of up to $37,500 per vehicle, individuals could be fined $3,750 per violation of the Clean Air Act, which could theoretically add up to nearly $1.9 billion, given the number of cars involved.
Industry analysts said the VW CEO faces difficult questions in the coming days. A German news agency reported that key members of the VW board will hold a crisis meeting Wednesday, and the full board is set to meet Friday.
