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Ever since the VW scandal broke several weeks ago, one facet of the problem has remained unclear. Why would VW design such an elaborate cheating program when it knew that beingness caught could be then ruinously expensive for the visitor? German officials are in the midst of an investigation to answer that question, just the early on details suggest a straightforward answer: VW cheated considering information technology knew its diesel engines weren't skilful enough to meet modern air quality standards in the United States or Europe.

According to the New York Times, VW discovered in 2008 that the new "clean diesel" engines it had spent years creating simply couldn't evangelize what it needed. That's particularly pregnant given the gap betwixt United states of america and European regulations on particulate pollution and NOx. The US has tighter regulations in some of these areas than Europe does, but VW's vehicles weren't capable of meeting either standard. The engine in question, the EA 189, is manufactured in 1.6L and 2.0L variants and is used in millions of vehicles beyond VW'southward brand family.

EA189
The problem was stark. Dorsum in 2007, VW had chosen non to use the urea-based diesel exhaust fluid organisation (marketed as AdBlue) that its higher-end rivals, Mercedes and BMW, had adopted. The company didn't have time to retrofit the engine with the AdBlue system or to make the changes that would've been necessary to retrofit the system to existing vehicles. It looks as though VW had to choose between missing the 2009 model year in the United States or cheating on its tests — and chose to cheat. VW does use the AdBlue system in other vehicles, incidentally, though some of these are also under investigation for whether they violated Usa and EU law.

Information technology'due south yet unclear exactly which executives made these decisions, simply the former CEO, Martin Winterkorn, had a reputation for setting extremely ambitious goals and harshly disciplining subordinates that failed to meet them. The chances that a phone call this critical was fabricated by some random low-level engineer are essentially zero. Nosotros suspect that when VW talks well-nigh the EA 189 failing to see emission control standards in the EU and Europe, VW ways that it failed to meet emission standards while delivering the performance and fuel efficiency goals that the company had previously prepare. If the EA 189 engine hadn't been capable of meeting emission standards at all, it never could've cleared EPA or EU testing in the get-go identify.

VW chairman warns that crisis could destroy the company

VW'due south new chairman, Hans Dieter Poetsch, has called the scandal "an beingness-threatening crisis for the company," and VW has taken out full-page ads to apologize to owners and to plead for public trust. Investors have responded to the growing scandal past fleeing VW's stock, wiping out an estimated $34 billion in value. Earlier this crisis, VW was a salubrious company with significant cash reserves, but fines and recall requirements could cost the company tens of billions of dollars depending on the nature of the set up and just how many vehicles it has to fix. Between Audi, Skoda, and VW itself, the combined total is over 14 million cars.

VWAd

VW's total-folio ads in Federal republic of germany

Regulatory fees and repairs won't impale the visitor outright, but heavy penalties would significantly reduce the greenbacks VW has on mitt to invest in time to come vehicles. If dealers and customers respond to the crisis past buying from other companies, VW could enter a death spiral, where slumping sales and falling revenue left the company unable to regain marketplace share or compete effectively.

In that location are even so questions we don't have answers to. How did VW miss the fact that its new EA 189 engine couldn't pass EU or US emissions tests, when EU tests are far more than lenient? Go along in mind that these vehicles emit up to 40x more NOx pollution than allowed by law. VW's alternate emissions control technology didn't miss by a niggling, simply by more than than an lodge of magnitude. Practice these problems affect vehicles that use the AdBlue injection system, or are they confined to the EA 189 engine? Does VW's newer engine, the Type EA288 TDI, have the same trouble, or did VW solve it by adding AdBlue? And, finally, was VW the merely company adulterous like this, or are other diesel manufacturers going to be defenseless in the aforementioned trap?

The answers to these questions volition determine whether VW survives — and ultimately, perchance, whether or non diesel fuel passenger vehicles remain on the road.