Volkswagen's clean diesel technology found to be fraudulent.

Volkswagen's clean diesel technology found to be fraudulent.

Volkswagen has recently told U.S dealers to halt sales of some 2015 diesel cars after the United States Environmental Protection Agency (EPA) announced that the company admitted to systematically cheating on U.S air pollution tests for years.

Diesel versions of the Beetle, Golf, Jetta and Passat series comprise more than a quarter of the brand’s sales in the U.S. and are a vital part of the company’s push to meet the tougher U.S fuel economy standards that are to going to come into effect in the next few years. Compared to other car makers, Volkswagen has chosen to focus on diesel technology instead of electric cars or hybrid models, and this could well be one reason why, as it evidently has proven easier to fudge fuel-economy numbers than to invest in the research needed to optimize engines.

Volkswagen admitted to selling 2009-2015 diesel Volkswagen and Audi cars with software (dubbed a defeat device) that only turns on full pollution controls when the car is undergoing official emissions testing. The EPA estimates that the cars actually pollute 10 to 40 times the legal limits, hence the severity of the fraud committed.

The financial liability at this point is unclear, but the EPA’s assistant administrator for enforcement, Cynthia Giles says that the EPA could fine the company US$37,500 per violation. With 482,000 units part of the case, the total could come up to more than US$18 billion, but the EPA says that automakers often settle cases at much less than the maximum possible fine.

The company could also face legal action if prosecutors agree with the EPA’s assertion about the software. The Clean Air Act contains criminal provisions which apply to tampering with monitor devices, as well as making false statements to the EPA, and legal experts seem to be in agreement that the evidence indicates that cheating the testing is something that was actively pursued by Volkswagen.

Sources: Bloomberg.com, The New York Times.com