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VW’s ‘Defeat Device’: Cost and Culprit

First the bad news: Volkswagen CEO Matthias Mueller says it probably will take months for the German automaker to determine who was ultimately responsible for the damaging scandal over exhaust emissions from its diesel-powered vehicles.

The good news, also delivered Monday by Mueller, is that the company can retool most of the more than 11 million vehicles that had been programmed to cheat on emissions tests.
“The efforts [needed] to carry out the refits are technically, mechanically and financially manageable,” Mueller told at meeting of about 1,000 VW managers at the company’s headquarters in Wolfsburg, Germany. “This is a good development.”

Mueller said he expects to issue an update on the company’s investigation into who was responsible for installing the cheating software by mid-December, but that report probably wouldn’t be final. “It will take several months before there are conclusive findings,” he said, according to excerpts of his speech seen by various news organizations.

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According to Muller, VW now has German approval to retool most of the 8.5 million diesel vehicles sold in that continent. He said more than 90 percent of them could be fixed without undue strain on the automaker.

Meanwhile, Audi, whose cars are manufactured by VW, said Monday that the company is also close to winning the approval of regulators in the United States to resubmit its emissions software for examination. About 85,000 vehicles in the country must be repaired. Replacing the software would cost in the “mid-double-digit millions of euros,” according to Audi.

As for VW-branded vehicles sold in the United States, Mueller said VW needs to refit cars powered by 2-liter engines, including the Golf, Jetta and Passat models manufactured since 2009. The company doesn't yet know how they must be fixed, but the solution could be more intricate and therefore more expensive than the repairs to similar cars in Europe because of stricter U.S. emissions standards.

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VW-made vehicles with 1.6-liter engines will need some equipment refits as well as new software, Mueller said, but the hardware involved would be inexpensive and easy to install. The automaker is still working on what changes are needed for cars with 1.2-liter diesel engines, he said, but expects a software update will be all that is needed.

The company admits that somehow its engineers installed software, called a “defeat device” into the affected vehicles to detect whether they were undergoing an emissions test, which would then turn on the car’s emissions controls in order to pass the test.

Once the software detects that the test is finished, it disables these controls to improve the vehicle’s performance on the open road. As a result, the cars discharged as much as 40 times more toxic nitrogen oxide than is permitted under the environmental laws of most countries.

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Evidently VW’s internal probe isn’t going smoothly. Earlier this month, the company resorted to offering a limited window of amnesty, expiring on Nov. 30, to any employee who volunteers information about who was behind the installation of the defeat device. That employee would be indemnified from being fired, but not from criminal prosecution.

Prosecutors in Braunschweig, near Wolfsburg, have mounted a criminal investigation into the scandal, with a focus on six suspects whose identities have not been made public, Birgit Seel, a prosecutor and spokeswoman for the Braunschweig state attorney, told The New York Times.

By Andy Tully of Oilprice.com

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