Volkswagen Dieselgate update: Audi made defeat device in 1999, scandal-related costs rising fast

April 25, 2016

Last Thursday, Volkswagen surprised more than a few observers by meeting a court-ordered deadline to submit repair plans for 482,000 2.0-liter Audi and VW diesels equipped with defeat devices that help them cheat on emissions tests.

That's the good news.

The bad news? The recall/buyback plan remains largely under wraps, and it doesn't address the 85,000 3.0-liter Audi, Porsche, and VW "clean diesels" that were also engineered to cheat their way through emissions tests.

We're confident that much more info on that front will become available soon--at least by June 21, when Volkswagen has been ordered to make the details public. In the meantime, here are a half-dozen Volkswagen Dieselgate-related news items you might've missed.

Is Audi to blame for Dieselgate? VW sales have hit the skids since news of the diesel scandal broke last September, but Audi has survived relatively unscathed--in fact, it's thrived. The irony is, it appears that the illegal software that permits Volkswagen diesels to skirt emissions regulations was actually designed by Audi engineers way back in 1999.

Volkswagen says there's no need for a court trial: We're certain that Volkswagen will make many, many trips to courtrooms over its illegally rigged diesels. Some of those trips will involve fighting suits filed by consumers who feel cheated by the German automaker. But Volkswagen thinks that a federal trial over its shady engineering practices isn't warranted, since the company has worked so diligently to uncover the wrongdoers in its ranks and made so much progress toward a viable repair plan.  

Emissions tests will likely get more challenging for automakers: In the United Kingdom, the Dieselgate scandal is leading to stricter emissions tests that include on-road evaluations. The 32 U.S. states that require regular emissions tests may not go quite that far, but you can bet they'll get a bit tougher to cheat on.

The cost of Dieselgate is rising: Last October, we wagered that Volkswagen's diesel crisis would cost the company north of $25 billion. To date, however, the automaker has only allotted around $8 billion for Dieselgate costs. Volkswagen may finally be getting the picture, though: new reports suggest that the figure will creep into the double digits, with a reported write-down of over $18 billion expected for 2016 alone. And at least one analyst sees the final cost landing between $23 billion and $28 billion. Not to say "we told you so", of course.

VW dealers worry about inventory during the recall: You might think that the part of the Dieselgate crisis most worrisome to VW dealers would be interacting with angry customers. But at least some dealers are concerned about the fact that they have so little inventory to sell those folks after their cars have been bought back. The worries are especially pronounced with regard to diesels, since all VW diesel sales have been halted until the recall/buyback process is resolved. 

Mercedes-Benz probe deepens: Remember how Mercedes-Benz owners became suspicious of their own cars after Dieselgate became front-page news? Remember how they filed a class-action lawsuit against Mercedes' parent company, Daimler, because they believe their own cars produce more pollutants than advertised (which, to be fair, they probably do)? Well, Daimler may still think the suit is "baseless", but it's taking the matter seriously, having ordered a substantial internal investigation into the matter.

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