European regulatory failure
Volkswagen’s management are caught like a frightened rabbit in the beam of their own headlights and seem incapable of making a wise decision.
The first massive error of judgement was the choice managers made to add so-called “defeat device” software to more than 11 million of their vehicles, which would conceal from testing machines the fact that deadly nitrogen oxide emissions were nine times above permitted levels.
There would always be the software out there waiting to be discovered. Somehow or other, no one thought through the risk of immense reputational damage, let alone of immense cost of fines and fixes.
Now it has been discovered that the software cheating has not been confined to the models first fingered by the US Environmental Protection Agency.
Porsches and Audis have also been installed with cheat devices. Though VW has suspended sales of its best-selling high range Cayenne SUV, it is insisting that the software fixing is not the same as the “defeat devices” that it fitted to other models. This is extremely odd.
It is admitting once again that it cheated but is trying to exonerate itself by insisting it is not the same cheating that it had been doing before. It has also now admitted that it has rigged the figures on the emission of carbon monoxide, the main greenhouse gas.
VW management say that after a vigorous internal investigation, it has discovered that this problem affects some 800,000 vehicles including some with petrol engines.
The question is now being asked, if the world’s biggest automaker can be caught out in such a massive fraud on emissions and vehicle performance, damaging the environment and duping customers, what about the rest of the industry?
This scandal was able to occur because of massive regulatory failures. The Europeans are seriously at fault here. The EU commission nodded through lax and unrealistic testing, undertaken by manufacturers themselves.
It ignored a large body of evidence that fuel consumption figures given to would-be purchasers were entirely unrealistic in real-world rather than laboratory test conditions.
Perhaps most disastrously, in the face of the VW revelations, the EU has refused to tighten the performance regulation regime but instead actually pushed back the date on which manufacturers will have to comply with tougher standards. At the heart of this pusillanimous response is the fear for European automotive industry jobs.
Yet the regulators are very largely to blame, not least in accepting industry claims that diesel engines are less polluting, when there was a significant body of research that said they were actually worse for the environment. Proof positive of this failure is that in the last 15 years, there has been no average improvement in European air quality.
A consequence of the EU’s blinkered failure is that it has also undermined the development programs for cleaner hydrogen and electric engines. The collapse of VW’s high reputation for honest engineering is also the collapse of Brussels’ reputation for honest regulation.
This emissions and fuel performance scandal surely has a very long way to run and it seems almost certain that more reputations are going to be dragged through the mud.
But the EU could start to clean up its act by reversing its craven extension of the date for tougher environmental standards and forcing the automotive industry to introduce innovative technology far sooner than currently permitted.
