VW emits clouds of deceit

THE phrase “cutting corners” does not do justice to the gravity of the charge. What German car maker Volkswagen (VW) stands accused of is closer to outright deceit. VW has admitted to fitting 500,000 diesel cars with code that tricked regulators into under-recording noxious emissions.

As well as posing harsh questions of its governance, VW’s alleged misconduct draws uncomfortable attention to the technological future of diesel. Europe’s car industry has long favoured diesel, in large part because of environmental advantages in terms of carbon emissions and fuel efficiency. These have led countries such as the UK to skew their tax system in its favour. But in terms of emissions of nitrous oxide and fine particulate matter, diesel engines are dirtier, a reason the world beyond Europe has remained so averse to their use.

VW’s misconduct appears motivated by a strategic need to promote diesel as an all-round winner. Its “defeat” software activated controls over nitrous oxide emissions only when the software detected that the engine was being tested. Otherwise, it could run full throttle.

Europe accounts for 75% of all diesel car sales, which gives its car makers a need to extend the market — and policy makers reason to cheerlead their efforts. It is noteworthy how it took a US regulator to carry out the detective work. The Environmental Protection Agency (EPA) has introduced high standards for diesel cars to prevent the occurrence in the US of what one campaigner has called “a public health catastrophe for Europe”. At worst, VW can be accused of pursuing a deliberate strategy to thwart the EPA, in blithe disregard for the effect on US health.

The gravity of such a charge is one reason for such a violent market reaction to the EPA’s revelations. Another is how VW misled not just its customers but the regulator directly. VW now faces steep fines and possible criminal charges, and a difficult time restoring its brand. Worst may be the damage caused to the reputation of “clean diesel”.

Given the strategic implications, the question is how VW’s senior management could have allowed such a blunder. Somewhere within this group is a chain of command that led to the production of software that fooled regulators.

VW CE Martin Winterkorn has apologised, but he must explain how someone claiming an engineer’s eye for detail could miss such a glaring design feature. London, September 22