Audi Has Been the Object of Another Emission Cheating Investigation
American authorities have discovered another popular car company owned by Volkswagen Group AG (ADR) (OTCMKTS:VLKAY) that has been using software to modify car emissions: Audi. This marks yet another blow for the Volkswagen Group after the 2015 scandal that came to be known as “Dieselgate.” (Source: “Audis have software that can cheat on emissions tests too, Volkswagen says,” CBC, November 14, 2016.)
According to reports, Californian authorities have identified that some Audi models were equipped with suspicious software. The software helps cars lower their carbon dioxide emissions, supposedly a leading contributor to the anthropomorphic cause of climate change. For Volkswagen, still reeling from last year’s scandal, this latest discovery of emission software could complicate matters significantly.
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However, Audi’s software is different from what emerged in October 2015 with some of VW’s diesel engine cars. This is a sign that perhaps the manipulations were more complex than expected. (Source: “VW, Audi Confirm Investigation Into Carbon Dioxide Levels in Some Audi Cars,” The Wall Street Journal, November 14, 2016.)
The Wall Street Journal said that Volkswagen has not yet commented, preferring to wait until the completion of investigations by the U.S. Department of Justice. However, in Germany, investigators continue. They are also investigating possible market manipulation. They accuse VW of having failed to warn shareholders of the possible financial impact of the scandal.
Many shareholders worry that the company has not renewed its leadership as needed. They might add that the group remains in the hands of those who caused the Dieselgate scandal in the first place. Meanwhile, investigators are considering Audi’s transmissions this time. They suspect a deliberate design that would enable Audi cars to cut CO2 emissions during controlled lab tests. In normal driving conditions, the same transmissions would allow higher emission output, as VW and Audi have confirmed. (Source: Ibid.)
The advantage is an improvement in dynamic performance, as engines would be less constricted. This could trigger another scandal in the United States for VW. It’s not clear what effect it could have in Europe, given the different scope of regulations.
