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The prospect of Volkswagen being fined $18 billion for manipulating air pollution tests in the US caused its shares to fall 22% and is sending shock waves through the automotive industry. VW has been ordered to recall nearly 500,000 cars, meaning a massive bill to correct the vehicles and potential class action claims for compensation. After initially refusing to comment, CEO Winterkorn issued a statement saying he was “very sorry”. The evidence suggests he will not be the last head of a carmaker offering apologies in the next few months as other manufacturers will be found making use of “defeat devices” for tricking laboratory tests.Diesel cars are niche in the US, and in most of the rest of the world, representing just one in 7 cars sold worldwide. The VW recall is not large by global standards. But in Europe over half of new cars are diesels – 7.5 million of the 10 million sold globally last year were bought in Europe. There is strong evidence that similar illegal devices are also used in Europe by both VW and other manufacturers. Since 2009 (when VW began using defeat devices) over 40 million diesel cars have been sold in Europe, a sixth of all cars on the road today.Over the past three years, Transport & Environment (T&E), with the support of the International Council on Clean Transportation (that alerted US authorities to its concerns over VW), has exposed countless ways carmakers manipulate emissions tests for both air pollution and CO2 emissions (fuel economy). For example, carmakers charge the car’s battery before a test, deduct 4% from each test result, and use incorrect laboratory settings for the inertia of the vehicle. The companies admit these tricks but claim they are “legitimate flexibilities” in the obsolete test used in Europe. Governments and the European Commission have been unwilling to challenge the industry and close the loopholes, instead focusing on introducing new testing systems that are scheduled to begin in three years’ time for all new vehicles.
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