Five things to know about Germany’s ‘dieselgate’ scandal

The emissions cheating scandal, which on Tuesday saw three Volkswagen chiefs charged and its rival Daimler heavily fined, has had major repercussions for the car industry since it broke four years ago.

Five things to know about Germany's 'dieselgate' scandal

Exposed in 2015

On September 18th, 2015, the US Environmental Protection Agency (EPA) reported that VW had installed illegal “defeat devices” in hundreds of thousands of engines in the United States since 2009.

The software — used in the Volkswagen, Porsche, Audi, Seat and Skoda brands — helped the cars meet exhaust pollution standards when monitored in tests even though their emissions actually exceeded the limits.

It meant that some cars spewed out up to 40 times more harmful nitrogen oxide — linked to respiratory and cardiovascular diseases — than legally allowed.

The company later admitted that 11 million diesel vehicles worldwide, including 8.5 million in Europe and 600,000 in the United States, had been fitted with the software, most of them in the VW brand.

SEE ALSO: 'Dieselgate': German prosecutors charge former Audi boss with fraud

Legal fall-out

VW chief executive Martin Winterkorn, who stepped down five days after the scandal broke, was in April 2019 charged with serious fraud, unfair competition and breach of trust.

Eight former and current executives and an Audi official have been charged in the United States, including Winterkorn.

Audi chief executive Rupert Stadler was charged in July 2019 with fraud, falsifying certifications and illegal advertising in connection with the “defeat devices”.

Former Audi head Rupert Stadler at a press briefing in 2018.

VW's guilty plea to a US criminal case in March 2017 settled its legal entanglements there, bringing to around $22 billion the amount it agreed to pay in fines and compensation to owners and dealers and for environmental clean-up.

The group still faces investigations and lawsuits around the world, in Europe the countries include Britain, France, Germany, Italy and Poland.

Costs for VW

The scandal has so far cost VW around 30 billion in fines, compensation and buybacks, mainly in the United States.

The company announced a net loss of nearly €1.6 billion in 2015, its first in 20 years, after setting aside billions to cover the costs of the dieselgate.

In June 2018 it agreed to pay a 1 billion fine in Germany, admitting its responsibility for the diesel crisis.

Audi agreed in October 2018 to pay an 800 million fine and Porsche was in May 2019 ordered to pay a fine of 535 million.

Other carmakers?

Tests in the wake of the scandal found that diesel engines by other carmakers were also more polluting on the road than during testing.

But none have so far admitted to mass cheating.

However Mercedes-Benz maker Daimler was in June 2018 ordered to recall 774,000 diesel vehicles across Europe because they too were fitted with illegal “defeat devices”.

Fiat Chrysler agreed in January 2019 to a pay $515 million to settle claims it installed the software.

And in February 2019 German prosecutors fined high-end carmaker BMW 8.5 million euros over diesel cars with higher harmful emissions than allowed, though they found no criminal wrong-doing.

Opel is also being investigated.

A worker holds up a Volkswagen badge at the VW plant in Wolfsburg. Image: DPA

Market reaction

A study released in March 2017 said that pollution from 2.6 million rigged VW cars sold in Germany would likely cause 1,200 premature deaths in Europe because of the excess emissions.

In Germany more than 410,000 customers are demanding compensation, as are

More generally, European drivers appear to have largely shrugged off the controversy while VW sales have fallen in the United States.

VW said in July 2019 it expects “slightly higher” unit sales for the year than in 2018.

SEE ALSO: VW sees steady profits in 2018 results

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‘Infringement on air quality’: EU court slams Germany for pollution in cities

The EU's top court ruled on Thursday that Germany continually violated upper limits for nitrogen dioxide, a polluting gas from diesel motors that causes major health problems, over several years.

'Infringement on air quality': EU court slams Germany for pollution in cities
Cars sit in traffic in Stuttgart's Hauptstätter Straße in July 2020. Photo: picture alliance/dpa | Sebastian Gollnow

Germany infringed air quality rules “by systematically and persistently exceeding” the annual nitrogen dioxide limit in 26 out of 89 areas from 2010 to 2016, the European Court of Justice (ECJ) said in its ruling.

The European Commission, the EU’s executive arm, referred the matter to the ECJ in 2018 after almost a decade of warnings that went unaddressed.

The decision against Europe’s top economy echoes a ruling targeting France in October 2019 after the commission stepped up its anti-pollution fight in the wake of the so-called “Dieselgate” scandal that erupted in 2015 with revelations about Germany’s Volkswagen.

The motors caught up in the scandal — in which automakers installed
special emission-cheating devices into their car engines — are the main emitters of nitrogen oxides that the European Environment Agency says are responsible for 68,000 premature deaths per year in the EU.

READ ALSO: Five things to know about Germany’s dieselgate scandal

Nitrogen dioxide is toxic and can cause significant respiratory problems as one of the main constituents of traffic-jam smog.

Under EU rules, member countries are required to keep the gas to under 40 micrograms per cubic metre — but that level is often exceeded in many traffic-clogged European cities.

The judgement opens the way to possible sanctions at a later stage. However the air quality throughout much of Germany has improved in the last five years, particularly during the shutdowns in the pandemic.

The environment ministry said that 90 cities exceeded national pollution limits in 2016 — the final year covered by the court ruling. By 2019, the number had fallen to 25 and last year, during the coronavirus outbreak, it was just six.

The case involved 26 areas in Germany, including Berlin, Hamburg, Munich and Stuttgart as well as urban and rural areas in North Rhine-Westphalia, Mainz, Worms/Frankenthal/Ludwigshafen and Koblenz/Neuwied.

“Furthermore, Germany infringed the directive by systematically and
persistently exceeding, during that period, the hourly limit value for NO2 in two of those zones” — the Stuttgart area and the Rhine-Main region.