Volkswagen Group Faces Hurdle After U.S. Regulators Discover Another Cheating Device In Audi Cars
The Volkswagen Auto Group came under fire in 2015 for a massive cheating scandal which affected 2.1 million Audi vehicles. Now, four months after the court has granted final approval for a $14.7 billion settlement, U.S. regulators found software in some Audi cars which detected when a car was under test conditions to lower their carbon dioxide emissions. As the German carmaker looks to cut a deal with the U.S. Department of Justice, how bad is the news for Volkswagen?
Another Cheating Device In Audi Cars for Volkswagen Group
New allegations of cheating arose for Volkswagen Sunday when engineers at the California Air Resources Board (CARB) discovered another device in Audi vehicles which lowered the car’s emissions during testing. This is a separate device from findings in Volkswagen’s 2015 emissions cheating scandal with the U.S., in which Audi rigged 2.0-liter diesel cars. That catastrophe’s resulted in Volkswagen agreeing to pay a $14.7 billion settlement. The new device was also used in diesel and gasoline powered vehicles in Europe, meaning Volkswagen could be about to become a target for European regulators, as well.
The software discovered by CARB, which was installed in vehicles with certain automatic transmissions, detected whether a car’s steering wheel was turned. Since the only time a vehicle would be running without the wheel turning would be in a laboratory setting, Audi engineers set a program to recognize If the wheel was turned in any direction by more than 15 degrees. If not, the car was in a testing condition, and an emission reducing software provided passing inspection scores. However, when the wheel is turned in a regular real-life setting, the program was switched off and emissions would be much higher.
According to reports, Audi stopped using the software in May 2016, just before CARB discovered the manipulation in an older model. The carmaker has suspended several engineers in connection with the matter, but is that enough? Audi, the main profit contributor to Volkswagen Group, also admitted its 3.0 liter V6 diesel engine was fitted with emissions-control software and is working with the U.S. government and California regulators on a proposed fix for those vehicles.
The $14.7 billion settlement only covered two-liter diesel vehicles affected in the U.S. The three-liter engines will fall under a new settlement, which is still being negotiated. Now, regulators will look to maximum penalties for VW. In addition to that, the company is recalling about 9 million vehicles in Europe, and possibly facing criminal and civil charges for violating securities law or committing fraud.
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Last year’s mess started a selloff of Volkswagen shares, causing the company to lose 35 percent of its market value. With a new scandal and ongoing negotiations with regulators, things are about to go from bad to worse for Volkswagen group.
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