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Volkswagen now in even deeper water with CO2 fraud

Translated Saturday 7 November 2015, by Ciaran Edwards

After the large-scale rigging of its diesel engines, Volkswagen admitted to more lies on Tuesday, pushing the German giant of the automotive industry further into crisis.

Volkswagen, a colossus with 12 brands and 600,000 employees across the globe, the jewel of German industry, reported "irregularities" on Tuesday night with the carbon dioxide emissions of 800,000 cars worldwide, adding a new component to the resounding scandal that has been rattling the company since mid-September. In concrete terms, the CO2 emissions – a factor of global warming – produced by VW, Skoda, Audi and Seat vehicles with petrol and diesel engines are higher than what Volkswagen promised their customers they were.

The German newspaper FAZ, who on Wednesday cited internal service documents that point out these "irregularities", gave the VW Golf Blue Motion as an example. In truth, the car emits more than 100g of CO2 per kilometre, instead of the 90g/km promised by the manufacturer and shown in the model’s technical specification.

The maximum permitted by European standards is 130g/km, and will lower progressively to 95g/km by 2020. The European regulations have been the subject of some intense haggling, with Germany reluctant to penalise its manufacturers of big saloons with overly restrictive limits.

The discovery of Volkswagen’s latest lie – which, unlike the fraud unveiled six weeks ago, is not being put down to a rigged piece of software or some other manipulation – reflects positively on the internal inquiry currently underway in the group, where the new boss Matthias Müller has promised a complete overhaul to bring all the company’s misdeeds to light.

In mid-September, Volkswagen, caught by American authorities, admitted to having equipped the diesel engines of 11 million vehicles across the globe with software capable of falsifying anti-pollution test results. The cars concerned actually emit much more nitrogen oxide (NOx), a pollutant gas, than they should.

All of these vehicles must be recalled to be made to comply with standards, which will cost Volkswagen billions. Additionally, the group must expect penalties, and will be subjected to a multitude of lawsuits, from swindled clients and shareholders who will have suffered from the tumbling stock price that resulted from the revelations, flushing away several billions of euros in market capitalisation.

Volkswagen, who were in the red in the third quarter because of the scandal, estimates the "financial risk" of this new issue to be two billion euros, expecting that some customers will want to be reimbursed for the misrepresented goods. The revelations about the CO2 emissions – the gas Europeans are most watchful of – arrived just one day after new accusations from American authorities about the diesel engines: according to the Environmental Protection Agency, Volkswagen may also have lied about the NOx emissions of the 3-litre engines, and not just the smaller engines known about so far.

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