Porsche Targeted as U.S. Expands VW Emissions Cheating Probe

VW Says It Didn't Cheat on Porsche Cars
  • Regulator says it's looking into more models of diesel cars
  • EPA says VW `knew or should have known' about bypass system

Volkswagen AG is under increasing scrutiny after U.S. regulators expanded their probe of the emissions cheating scandal to include more models from Audi and diesels from Porsche, the business that had been run by the man tapped to clean up the carmaker.

The U.S. Environmental Protection Agency said Monday that some 2014-2016 VW, Audi and Porsche models with 3.0 liter engines have equipment to alter their emissions systems when they’re not being tested, the agency said in a letter posted to its website.

“VW has once again failed in its obligation to comply with the law that protects clean air for all Americans,” said Cynthia Giles, assistant administrator of EPA’s Office of Enforcement and Compliance Assurance.

Volkswagen denied the EPA’s claims that the cars added to the investigation manipulated emissions tests. The EPA is alleging that a software function in the V6 TDI diesel engines hadn’t been adequately described in the approval process, VW said.

VW Statement

“VW stresses that no software has been installed in the 3-liter V6 diesel engines to change emission results in an inadmissible way,” the company said in an e-mailed statement. “Volkswagen will fully cooperate with the EPA to clarify the matter unreservedly.”

The EPA and the California Air Resources Board announced Sept. 18 that they were investigating Volkswagen after the carmaker admitted to rigging the emissions systems of diesel vehicles so they would pass pollution tests. That announcement affected almost 500,000 cars in the U.S., and 11 million worldwide.

The expanded probe adds only about 10,000 additional cars now on the road, as well as an undetermined number of 2016 models, but draws in the prestigious Porsche brand that had been untouched by the scandal so far.

The cheating scandal has shattered Europe’s largest automaker, leading to the resignation of its chief executive, Martin Winterkorn. VW set aside 6.7 billion euros ($7.4 billion) in the third quarter for recall repair costs and already acknowledged this won’t be enough. Under the Clean Air Act, Volkswagen may be liable for fines as high as $18 billion, based on maximum penalties per car involved, and it faces further costs from lawsuits filed in the U.S. and Europe.

Porsche Chief

Matthias Mueller was named Winterkorn’s replacement. He had been the CEO of its subsidiary, Porsche, since 2010. Mueller spent his entire career at Europe’s largest automaker, including stints at the Audi and VW brands. 

During stepped up testing of diesel models on the road, EPA, CARB and Transport Canada discovered software in VW, Audi and Porsche models with 3.0 liter diesel engines that turns pollution-control equipment on when the cars are in “temperature conditioning” mode that mirrors federal test conditions, the regulators said.

The affected models are the 2014 VW Touareg, the 2015 Porsche Cayenne and the 2016 Audi A6 Quattro, A7 Quattro, A8, A8L and Q5. The vehicles’ emissions systems were rigged to turn off “one second” after government testing was complete, improving performance but causing nitrogen oxide emissions up to nine times the legal limit, Giles said.

VW “knew or should have known” that the vehicles had software installed that “bypasses, defeats or renders inoperative” emissions controls, the EPA said.

Congressional Hearing

“It seems extraordinary that this was not flagged within the company, investigated and declared in light of the challenges which the company has faced in the last 2 months,” Arndt Ellinghorst, a London-based analyst at Evercore ISI, said in a note.

Volkswagen AG’s top U.S. executive told lawmakers in Congress last month the emissions cheating was carried out by a few engineers in Germany without any formal decision by the company. He conceded it may take years to retrofit the bulk of the affected vehicles.

Michael Horn, president and chief executive officer of Volkswagen of America, said most of the cars will need more than a software update to comply with U.S. requirements. Volkswagen is looking at adding hardware such as improved catalytic converters or urea tanks, he said.

Compensate Customers

Volkswagen will compensate customers and address any impact on performance, Horn said. He said the fixes will maintain the car’s fuel efficiency.

Four members of a U.S. House panel conducting a separate investigation of the emissions cheating called Monday on Volkswagen to “come clean” in response to the EPA accusation.  
“The latest revelations raise the question, where does VW’s road of deceit end?” according to a statement from Representatives Fred Upton, a Michigan Republican; Tim Murphy, a Pennsylvania Republican;Frank Pallone, a New Jersey Democrat; and Diana DeGette, a Colorado Democrat. 

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