Earlier this week, the attorneys general of Maryland, Massachusetts, and New York filed civil lawsuits against Volkswagen in relation to the company’s diesel emissions scandal. And thanks to our colleagues at Road & Track, we were able to obtain the formal suit and damning complaint submitted by New York Attorney General Eric Schneiderman, which sheds new light on the company’s behavior.
Relying on corporate documents, staff e-mails, and employee testimony, the state’s complaint paints a picture of systemic deception by dozens of executives, senior managers, and engineers within the company, including former Volkswagen CEO Martin Winterkorn. According to an unnamed Audi executive, current CEO Matthias Müller was also made aware of the diesel-emission issue and cheat device at least a decade ago when he was the head of project management at Audi.
The complaint also establishes that the cheat device itself was first developed at Audi, in response to the development of a system dubbed Pilot Injection that the company began working on in 1999 for its 3.0-liter V-6 diesel engine. Pilot Injection poured additional fuel into the engine’s cylinders at startup to combat the traditional clatter at idle associated with diesel engines. Unfortunately, such a setup resulted in the engine’s failure to meet European emissions standards. According to the complaint, Audi then developed a defeat device that was able to recognize if the vehicle was being tested for emissions, disabling the Pilot Injection system if such a test was being conducted. Given its role in preventing diesel clatter, Audi referred to the defeat device as an Acoustic Function. This device never made it to the U.S. but was incorporated into Audi’s 3.0-liter diesel V-6 that it sold in Europe from 2004–2008.
The device eventually made its way to 2.0-liter four-cylinder diesels sold in 2009 Volkswagen Jetta and Jetta SportWagen models, and later the Volkswagen Golf, Beetle, Beetle Convertible, and Audi A3, as a means of avoiding premature parts failures. In the case of these cars, a soot filter was employed to capture particulates to maintain emissions standards. These particulates were then periodically burned up to prevent clogging of the soot filter; however, the complaint states that this process strained the filter itself, severely limiting its service life and causing it to break within 50,000 miles—less than half the full useful service life standard set by the U.S. EPA. In order to avoid this fate, Volkswagen then installed said device.
Similarly, the complaint notes that Volkswagen installed the device in vehicles with urea tanks to battle emissions as the company sought to avoid the re-engineering of its urea-injection system. In this instance, both four-cylinder and six-cylinder diesel engines were unable to maintain enough urea to last the duration of the vehicles’ 10,000-mile service duration. The complaint specifically calls out the role of the device in relation to the Porsche Cayenne. Before formally offering a diesel V-6 in the Cayenne, Audi engineers explained the strategy they’d developed so that the urea-injection system could meet EPA requirements. Despite this knowledge, Porsche’s top engineer, Wolfgang Hatz, who had previously led Audi and Volkswagen’s powertrain departments from 2001–2007 and 2007–2012, respectively, approved the use of the engine in the SUV.
The complaint goes on to note that communication between leaders and executives within each brand—as well as the lateral moves of employees and executives among Audi, Porsche, and Volkswagen—meant each brand was inherently aware of the use or planned use of the cheat device in the others’ vehicles. Ultimately, this resulted in the group as a whole working together to mislead regulators about the existence of the device, with Volkswagen and Audi going as far as to delete any reference of the Acoustic Function from ECU documentation and, the complaint said, to “bury” internal NOx testing results that revealed the vehicles’ real-world emissions.
Furthermore, the complaint adds that Volkswagen deceived regulators in its campaign to fix the affected vehicles, knowing its proposed software updates were unable to meet EPA standards: 2.0-liter four-cylinder engines without urea injection emitted 10 times the legal limit, those with urea injection emitted five times the legal limit, and the newest engine, found in 2015-model-year Volkswagens, could only be brought down to emissions at twice the legal limit. Meanwhile, V-6 diesels can be brought within legal limits but require more than twice the amount of urea dosing (thereby necessitating additional tank refills).
Despite all of this, the complaint notes that even as late as February 29, 2016, Volkswagen thought it could get away with little more than a slap on the wrist from U.S. regulators. Writing in response to a European shareholder lawsuit the company noted that: “Even the highest fine to date, which amounted to $100 million and was imposed in 2014 against the Hyundai/Kia group, was at the lower end of the statutory range of fines. This case involved roughly 1.1 million vehicles, which works out to a fine of barely $91 per vehicle. It is obvious that fines in this amount are not even remotely capable of influencing the share price of a globally operative company such as Volkswagen. Even if the fine were $100 per vehicle, the total penalty in the present case would amount to $50 million, which would have no potential effect whatsoever on share prices.”
Today, $14.7 billion in fines later and with more lawsuits to come, Volkswagen is learning just how wrong it was—on multiple levels.
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