Volkswagen’s pollution problems took a costly new turn on Tuesday when the company said it had understated emissions of carbon dioxide, a greenhouse gas, for about 800,000 of its vehicles sold in Europe, and overstated the cars’ fuel economy.
A limited number of gasoline-powered cars are affected, said Eric Felber, a company spokesman, expanding the focus of Volkswagen’s crisis beyond its diesel engines. It is the latest in a series of emissions revelations shaking the company, raising questions about the quality of its internal corporate controls and its reputation for engineering prowess, and undermining a carefully crafted image as a maker of efficient and environmentally friendly cars. The latest problem will force the company to incur an estimated 2 billion euros, or about $2.2 billion, in possible financial penalties, a spokesman said, because of tax breaks granted in Europe on cars with low carbon dioxide emissions.
Those costs would be on top of the 6.7 billion euros the company has already set aside to address its central emissions crisis, revealed in September when Volkswagen admitted that it had installed deceptive software in 11 million diesel vehicles to make it appear as if they met air-quality standards for nitrogen oxide, which poses a threat to human health. Volkswagen’s troubles have led to lawsuits from investors and car owners that are likely to cost the company billions of dollars beyond the money already set aside.
In a statement on Tuesday, Matthias Mueller, Volkswagen’s chief executive, said the company “deeply regretted” its false claims about the carbon dioxide emissions. He added that Volkswagen’s public statements about the problem should demonstrate that the company was determined to conduct a thorough inquiry. “It’s a painful process, but there is no alternative,” he said.
Felber said the company was still investigating what led to the false emissions data but that it had wanted to make the new information public as soon as possible. Volkswagen said it was most likely not a software issue. An official with the Environmental Protection Agency in the United States said the agency was still studying the Volkswagen statement.
Volkswagen said that most of the 800,000 vehicles affected by the carbon dioxide issue were diesels as well and that it discovered the problem while investigating the earlier software deception. It said a recall would not be necessary to fix the carbon dioxide issue. Most of the cars with the carbon dioxide problem are equipped with an engine line known as the EA 288, of which there are 1.4-litre, 1.6-litre and 2-litre versions. A small number of cars with gasoline engines are also affected, Felber said.
Volkswagen said it had made erroneous carbon dioxide and fuel-economy claims in Europe for cars beginning with the 2012 model years, as well as the 2015 and 2016 models currently on sale. The affected cars are the Volkswagen Polo, Golf and Passat and the Audi A1 and A3. Some SEAT and Skoda cars were also involved. The latest developments added to a difficult week for the auto giant. On Monday in the United States, the EPA separately said that more diesel vehicles than previously known, including the Porsche Cayenne SUV, were programmed to cheat on nitrogen oxide emissions.
Volkswagen disputed the accusation. In a carefully worded statement on Monday, the company said, in part, “that no software has been installed in the 3-litre V6 diesel power units to alter emissions characteristics in a forbidden manner.” On Tuesday, Volkswagen declined to answer questions to clarify the wording in that statement, specifically whether it meant that emissions-altering software had been installed in the engines and, if so, what the software’s function was. Later Tuesday, Porsche’s North America unit said it would stop selling 2014-16 diesel Cayennes “in view of the unexpected US EPA notice.” Crisis management experts said that the Monday statement by Volkswagen, which seemed to deny the EPA’s accusations but not clearly rebut them, might not help in any negotiations with the regulatory agency. “It is not obvious the company has really realized what a big deal this is,” said David Bach, a senior lecturer in global business and politics at the Yale School of Management.
Richard Barker, a professor at Said Business School at Oxford University, said that Volkswagen’s strategy so far to deal with the crisis could backfire. “The risk is that they spread out the bad news,” he said. “Then it damages their credibility. That could come back to haunt them.” An EPA official, Christopher Grundler, declined on Tuesday to comment on the Volkswagen statement. Grundler, director of the agency’s office of transportation and air quality, said the EPA was confident about its findings.
He said the tests were performed by three separate labs — the EPA’s, and by researchers at the California Air Resources Board and Environment Canada. All found the same results, he said. “Our conclusion that we announced yesterday is that we have sufficient evidence that we found defeat devices,” Grundler said, using a term to describe mechanisms that allow cars to cheat on emissions tests.