A week ago the equivalent of a nuclear bomb landed on Volkswagen with the EPA’s announcement they’ve been cheating smog laws with their TDI engines. Now a week into this breaking news, a lot has happened. And here is what we know today.
Volkswagen immediately admitted that indeed they had been dishonest with the EPA, their customers, the media and as it turns out, government agencies in other countries. The suspect software in their cars which runs clean for tests and dirtier for driving, they shared could affect some 11 million cars globally.
Because of the size and scope of the matter, which may arguably be the largest scandal of its kind in automotive history, heads began to roll immediately. Prof. Dr. Martin Winterkorn, the now former CEO of Volkswagen AG was the first to lose his job.
In an announcement Friday, Volkswagen installed Matthias Muller as the new CEO, who comes from his previous post at Porsche. That announcement was followed by a complete restructuring of Volkswagen management globally with much more to come.
The company has fallen on their sword for all intents, apologizing for breaking trust, breaking laws, and promising to cooperate fully with all government agencies who are now coming after them. And there are many, with not only civil penalties and recalls but quite possibly criminal charges.
In the wake of all this, Volkswagen AG stock plummeted this week in trading, losing about 34% of its value in the week following the EPA’s announcement. With all eyes on Volkswagen, the questions are mounting about what happens next for owners, dealers, the company and the future of TDI itself.
So lets start with owners of TDI cars. As a Volkswagen owner myself and a past owner of a TDI, I know we can be a proud and enthusiastic lot. It’s hard to find a TDI driver who doesn’t love their car and take pride in it. Well, at least until now.
The cars affected by this matter in the United States include all model year 2009 to 2015 four-cylinder TDI Volkswagens and Audis. Period. At this time, the 3.0 liter V6 found in the Touareg and Audi models is not part of the action but this could change.
Volkswagen issued a stop sale order on all new VW and Audi TDI cars affected by this action. Questions remain as to the saleability of used TDI’s by dealers in some areas. We have not gotten enough clarity on that yet to say up or down.
But, for now the EPA has stated it remains legal to drive them and owners can sell them. And beyond that, nothing needs to be done by owners at this time.
And that is the key here. If you own one, the best thing to do right now is nothing. Now is not the time to panic and sell it, you will take a bath. Waging war on your dealer for a fix right now is also not the best action, there’s nothing they can do yet.
Volkswagen has promised a fix, and there’s no doubt one will come. Because the newer cars 2015 model year and up can’t be sold because of a stop order, and have the latest emissions hardware on them with the EA288 engine, I suspect a fix for these will come first.
In fact as of today, it remains unclear to what degree the latest generation EA288 equipped cars are affected by this EPA action, other than the EPA has issued a non-compliance letter pending the outcome of an investigation.
VW has asserted on Friday the earlier generation EA188 and EA189 engines are the core of the concerns emissions concerns. Those earlier generation engines found in 2009 to 2014 models will be a tougher fix for Volkswagen as the emissions hardware these engines have is much less comprehensive.
And what the fix is for these remains to be seen. There is a lot of gloom and doom out there in the media, and a lot of misinformation. Anyone who professes to know exactly what the fix is at this point is speculating, and I’m not going to do that.
The fear is however that for VW to take such an enormous risk to have two software modes, one for testing and one for driving, there must be a significant trade off. This could be lower mpg, lower power, or less drivability. It could be all three.
If when the fixes come in, these metrics are less than what buyers expected or were promised when they bought, Volkswagen will face another wave of problems from customers in the form of class action lawsuits and all that comes with. So they will be motivated to make the fix a good one.
This scandal has rocked the entire automotive industry in ways we don’t even know yet. Dealers, factory workers, mechanics, owners and those in the halls of Volkswagen’s engineering departments all will feel the pain.
The EPA announced this week they will be re-testing all diesel cars from all manufacturers to see if anyone else needs to be hammered down. And you can bet this matter will have a chilling effect on any future diesel models from anyone who dare market them.
And on that matter let me share that we here at TestDrivenTV, myself in fact, have been an enthusiastic owner of these cars. Believe me when I say this scandal is deeply disappointing and sobering on many levels. It raises a lot of questions which I want answered.
I’ve test driven a number of Volkswagen TDI’s this year and they have made it to our Id Buy it list, our highest honor. So, in the last week we’ve been taking our barbs and ribbing over this in comments and emails, but for now they will remain on this list until we see how this shakes out.
I believe while a lot of facts have come out, not all of them have yet. And I believe Volkswagen or any company like them deserves a chance to make it right before they are cast into the lake of fire. And, once that fix comes, you can bet we’ll be watching closely and re-evaluating our positions on the TDI models at that time.
