Volkswagen Dieselgate scam

1. Volkswagen: Diesel Gate
Group 4
Anna Philip
S. Anupriya
Deeksha S
Aditya Venchamala
Agin P Jose

2. Profile
• Founded- 1937
• Country –Germany
• Head Quarters- Wolfsburg
• Every day, sells 592,586 employees worldwide produce
nearly 41,000 vehicle, sells in 153 countries.
• Recently surpassed Toyota as the world’s biggest automaker
measured by the number of cars sold.

3. US market
• Entered US market in 1955
• Initially headquartered in New Jersey . Currently in Virginia.
• Currently sells around 400,000 cars
• Market share in US

4. Current state in US
• Halt sales of Diesel cars in US
• Recall of cars with 4- cylinder turbo diesel engine from 2009-
2015.
• EPA ordered to recall half a million vehicles and pay 18
billion dollar fine.

5. EPA’s Fuel Economy Regulations-
• Light-Duty Vehicle Emissions Standards and Corporate Average Fuel
Economy Standards
Corporate Average Fuel Economy(CAFE)
MPG: Label Values vs. CAFE
• The Gas Guzzler Tax

6. Impact of NOx Emitted by VW’s Vehicles
• 11m cars are affected globally, VW's defective vehicles could be
responsible for between 237,161 and948,691 tonnes of NOx
emissions each year
• 250,000 to 1m extra tonnes every year.
• The damage from these VW vehicles could equate to all of the UK’s
NOx emissions from all power stations, vehicles, industry and
agriculture.
Source: The Guardian

7. NOx’s Impact on health
• Short-term NO2 exposures, ranging from 30 minutes to 24 hours, with
adverse respiratory effects including airway inflammation in healthy people
• Increased respiratory symptoms and issues in people with asthma.
• NOx react with ammonia, moisture, and other compounds to form small
particles. It can cause or worsen respiratory disease, such as emphysema
and bronchitis, and can aggravate existing heart disease.
• Concentrations of NO2 have been measured to be approximately 30 to
100% higher than concentrations away from roadways.
• Approximately 16% of U.S housing units are located within 300 ft of a
major highway, railroad, or airport (approximately 48 million people).
Source: EPA website

8. What is the Diesel gate scam?
• The scandal started on 18th September 2015 when the Volkswagen violated
the clean air act and was issued a notice of violation by the EPA.
• The company programmed their model year 2009-2015 TDI engines so that
US standards nitrogen oxides emissions were met only during emission
testing .
• Emission tests while driving were up to 40 times higher.
• The programme was named the defeat device, which is prohibited by the
clean air act.
• Approximately 11million cars world wide and 500000 in the US included
such programs.
Source:BBC.com

9. How did it all start?
• In 2005 part of VW wanted to purchase the Mercedes’ Blue tech system for
reducing emissions, but other parts of VW rejected this proposal.
• They decided to make their own system in association with Bosch.
• They started migrating their engines from TDI to common-rail fuel
injection.
• This system allows for higher-precision fuel delivery using electronically
controlled fuel injectors and higher injection pressure, theoretically leading
to better fuel atomization, better air/fuel ratio control, and by extension,
better control of emissions.
• This system failed to deliver and VW chose to fix the cars with a defeat
device which when tested would switch the car to produce less emissions
Source:BBC

10. How The VW Programmed Cars to behave on
testing Steps
1. Speedometer, steering wheel sensors
and air pressure sensors send data to
central computer.
2. Computer recognises that it is under test
conditions and switches on a ‘dyno
calibration’, which alters the working of
the engine to minimise emissions.
3. If road, rather than rolling road,
conditions are detected the computer
uses a ‘road calibration’, which bypasses
the emissions reduction mechanisms to
favour engine performance and
efficiency
4. The EPA says it was the NOx filter whose
behaviour was changing in the different
calibrations
Source: The Guardian

11. Direct effects of the scam on VW
• 500000 cars are planned to be called back in USA with a budget allocated
amounting to $6.5bn.
• EPA has the power to fine a company up to $37,500 for each vehicle that
breaches standards - a maximum fine of about $18bn.
• Total 11 million cars sold during this period around the Globe.
Source :BBC
• About 4% of their new stock is affected in UK
Sorce : Dailymail
• Estimated damage to its sales and reputation may cost Euro 35 billion
Source : Business-standard
$4.2 bn bonds maturing in Nov which are converted to share but facing huge
pressure from investor side also.
Source : Business-standard

12. Timeline
2007:
Suspected
software
first
installed
2011
Alarm
raised
2014:Rese
archers
search
vehicle
May 2015:
New tests
July
2015:Envir
onmental
questions
September
3: VW
Confession
September
18:
Authoritie
s go public
September
20:
Winterkor
n “sorry”
Stock sinks
Source : BBC

13. "The revelations are likely to
lead to a sharp fall in demand
for diesel engine cars," said
Richard Gane, automotive
expert at consultants
Vendigital.
"Diesel cars in Europe operate
with worse technology on
average than the US, Our latest
report demonstrated that
almost 90% of diesel vehicles
didn't meet emission limits
when they drive on the road.
We are talking millions of
vehicles." said Jos Dings, from
the pressure group Transport &
Environment.
"The industry acknowledges
that the current test method is
outdated and is seeking
agreement from the European
Commission for a new emissions
test that embraces new testing
technologies and is more
representative of on-road
conditions.“ SMMT.
"My most urgent task is to win back
trust for the Volkswagen Group - by
leaving no stone unturned," Mr
Mueller
"We've totally screwed
up," said VW America
boss Michael Horn
"We've totally
screwed up," said
VW America boss
Michael Horn