VW has admitted to deceiving emission tests in the US affecting 482,000 US vehicles going back to 2008. BNEF’s Colin McKerracher joined Bloomberg TV’s ‘The Pulse’ to discuss the scandal and its effect on diesel cars and the future of electric vehicles.
For background, the company says that up to 11m cars globally may be affected and has set aside $7.3bn to cover associated costs. Under the US Clean Air Act, the maximum fine is $18bn. In Colin’s note to BNEF clients he wrote:
- Following investigation by the Environment Protection Agency and California Air Resources Board, VW has admitted to using a “defeat device” to reduce NOx emissions during official testing which was then switched off during normal driving conditions.
- The EPA indicated that under normal driving, certain VW diesel models would exceed NOx emissions limits by 10 to 40 times. The agency has stated that it will be developing new protocols to test more effectively for the use of these techniques.
- This is not the first time the EPA has accused a manufacturer of using a defeat device but it is the first time a manufacturer has admitted its use. If the fines administered are anywhere near the upper limit of $18bn, this would be the most expensive case in US automotive history.