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VW diesel whistleblower identified in book

Automotive News  /  April 21, 2017

As Volkswagen’s criminal case closed on Friday, a nagging question persists: Who blew the whistle and first admitted to regulators that VW was lying about its dirty diesels?

Volkswagen AG was sentenced in a Detroit courtroom after pleading guilty last month to three federal felonies for diesel emissions violations, which were brought to light based on information given to federal law enforcement from an internal whistleblower.

A new book on the VW diesel emissions scandal by a New York Times reporter asserts that it was an American VW executive who first disclosed VW’s criminal acts to regulators.

The whistleblower named in the book: Stuart Johnson, head of VW’s Engineering and Environmental Office in the Detroit suburb of Auburn Hills, which has responsibility for VW’s interaction with U.S. regulators.

The book, due out in May, is Faster, Higher, Farther: The Volkswagen Scandal by Jack Ewing. Automotive News received a review copy of the book from its publisher, W. W. Norton & Co.

“You get the feeling from reading the documents that Johnson always felt queasy about the whole situation,” Ewing told Automotive News.

A spokeswoman for VW Group of America said the automaker declined to comment.

The cost of Volkswagen’s diesel emissions scandal, which involves about 11 million vehicles worldwide, is now about $25 billion and continues to grow.

The scandal, which became public in September 2015, led to the automaker buying back a half million cars in the U.S. and settling a lawsuit with the government for $14.7 billion. It is also responsible for the automaker admitting its guilt to three felonies under U.S. law -- a distinction that sets its actions apart from previous industry scandals.

In the book, Ewing quotes an interview with Alberto Ayala, the deputy executive director of the California Air Resources Board, naming Johnson as the first person to reveal to CARB the existence of VW’s “defeat device” software.

Key meeting

The book quotes Ayala as saying the revelation happened just prior to a key meeting between CARB and VW on Aug. 19, 2015, in El Monte, Calif., and that Johnson in making the disclosure was violating orders he had been given by his superiors.

That same meeting is spelled out in the federal indictment of Oliver Schmidt, a former U.S.-based VW executive facing 11 felony charges related to the diesel scandal. That meeting came after weeks of executive discussions concerning how to keep regulators from discovering that VW had installed a device that would make its diesels meet federal regulations only while running on the dynamometer test. 

The scandal became public Sept. 18, 2015, a month after Johnson met with Ayala, when the EPA announced that VW had violated portions of the Clean Air Act.

In the January indictments of six German VW executives -- including that of Schmidt, Johnson’s immediate predecessor in his current job -- the government’s main whistleblower is identified only as “Cooperating Witness 1.”

Witness cooperation

The indictments say that CW1 “is a VW employee who works in VW’s engine development department.” It’s unclear whether that characterization of CW1’s job was deliberately vague to hide the witness’s identity. The indictment says the witness “has agreed to cooperate with the government’s investigation in exchange for an agreement that the government will not prosecute CW1 in the United States.”

A second cooperating witness, CW2, whose identity remains unknown, also agreed to cooperate in exchange for an agreement not to be prosecuted, the indictments say.

Johnson was deeply involved in attempting to certify the diesel vehicles equipped with illegal defeat devices. Yet he has not been charged, unlike six German executives also involved in that attempt to certify the diesel engines.

FOIA request

Automotive News submitted a public records request to CARB on Jan. 19 seeking records from the Aug. 19 meeting. The agency’s response, issued Feb. 24, was largely redacted “as part of an investigation or settlement discussions.”

However, among the unredacted portions is an internal email among CARB employees from prior to the Aug. 19 meeting. It reads, in part: “VW has requested a meeting on the diesel issue. Stuart Johnson plans to be in El Monte with 4 staff from Germany.” It also says: “Hopefully, VW will provide the full details on how the controls really work on the in use vehicles and the 2016 vehicles that have cert(ification) pending.”

Ewing verified to Automotive News his conversation with Ayala.

A spokeswoman for former U.S. Attorney Barbara McQuade, whose office prosecuted the VW scandal and continues to pursue VW executives, declined to comment, citing the ongoing investigation.


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Tested - 2017 Chevrolet Cruze Sedan Diesel Automatic

Car & Driver  /  May 2017

Worth cashing in that VW buyback check for?

Across America, thousands of Volkswagen diesel owners are relinquishing their keys to dealers in exchange for generous buyback checks. Where will they spend that money? If the whole ordeal hasn’t turned them off to diesels entirely—and that’s a big “if”—General Motors is hoping to divert some of that cash its way, with the rollout of its new, 100 percent EPA-compliant turbo-diesel engine.

The 137-hp turbocharged 1.6-liter inline-four is available now in the compact Chevrolet Cruze sedan and soon will be offered in the Cruze hatchback as well as in the Chevy Equinox and GMC Terrain crossovers. It’s part of an exclusive club, being one of only six light-duty diesel engines certified by the EPA for the 2017 model year.

In a Class of One

With those Volkswagen Golf, Jetta, and Passat TDIs now banished, the Cruze is the only 2017-model-year, sub-$30,000 diesel passenger car for sale today. (However, new 2015 VW Passats are recently legal once again.) You have to go several rungs up the price ladder to find other diesel options, such as the Jaguar XE and the BMW 3-series, which carry base prices at least $10K dearer than the little Chevrolet.

Of course, the Cruze is no 3-series, but its high-tech diesel engine also comes at a significant price premium. The diesel is available only in one trim level, starting at $24,670 with a six-speed manual transmission, which is $2950 more than an equivalent gasoline-powered Cruze LT sedan. (Incidentally, that price is smack dab in the middle of the range of what VW estimates it will pay owners to buy back a 2015 Jetta TDI sedan.) The optional nine-speed automatic transmission ($1600) and $1125 leather-seating package bundled with a heated steering wheel drove our test car’s total to $27,395.

Puts Up Big Numbers

The nine-speed gearbox is an impressive unit, serving up smooth and seamless shifts and effectively allocating the 240 lb-ft of torque.

Despite an 18 percent reduction in displacement compared with the previous-generation Cruze’s 2.0-liter diesel, the new car hits 60 mph in an identical 8.0 seconds (that’s only 0.4 second behind the performance of the gas model’s turbocharged 1.4-liter).

The diesel’s aluminum engine block, along with general weight reduction in the new model, helps it drop 364 pounds versus the last diesel-powered Cruze. Roadholding and braking improve, too, with our car returning a respectable 0.84 g of grip and a 167-foot stop from 70 mph. The new engine also is quieter than before, making itself known only upon cold startup; once it’s warmed up, there’s little to no hint of diesel clatter.

Naturally, fuel economy is a crucial metric. It’s up, according to both the EPA and our tests. The government rates it at 37 mpg combined—a 5-mpg bump from the previous Cruze diesel—with either transmission, and our overall average matched that impressive number. In our real-world, 75-mph highway loop, the Cruze achieved a remarkable 52 mpg, 6 mpg better than a Toyota Prius and about 10 percent better than the EPA’s 47-mpg highway rating. If it’s similarly overachieving, the manual Cruze diesel might do better still, given its 52-mpg EPA highway rating. Long-haul drivers take note: 700-mile stints between fill-ups are definitely within reach.

Elusive VW Appeal

The Chevrolet’s numbers, then, leave no doubt that it’s capable of taking the diesel baton from Volkswagen. Unfortunately, the Cruze does a less convincing VW impression in other regards. It offers a commendable ride-and-handling balance, but it lacks the precisely tuned damping, sharp on-center steering feel, and overall solidity that make VW Golfs and Jettas so satisfying to drive. The Chevy’s cabin, though vastly improved over GM small-car interiors of yore, also lags behind VW’s impeccable interior quality.

GM’s newest diesel engine is an undeniably impressive engineering achievement, delivering solid performance and chart-topping efficiency while fully complying with federal emissions regulations. But its appeal is limited by the middle-of-the-pack compact sedan in which it’s installed. Chevrolet may lure a few less discerning TDI owners with the Cruze diesel’s stellar fuel economy, but we note that the appeal of Volkswagen’s TDIs went beyond their powertrains.

Photo gallery - http://www.caranddriver.com/photo-gallery/2017-chevrolet-cruze-sedan-diesel-automatic-instrumented-test-gallery#1

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Daimler drops bid to win approval to sell U.S. 2017 Mercedes diesels

Reuters  /  May 9, 2017

Daimler AG said on Tuesday it had dropped plans to seek U.S. approval to sell 2017 Mercedes-Benz U.S. diesel models, but had not decided whether to exit the American passenger diesel market.

"We constantly review our portfolio offerings and make adjustments to meet immediate customer need," Mercedes-Benz USA spokesman Rob Moran said in an email. "Combined with the increased effort to certify diesel engines in the U.S., we have put the certification process for diesel passenger cars on hold."

There has been growing scrutiny of diesel vehicles in the U.S. since Volkswagen AG admitted in September 2015 to installing secret software on 580,000 U.S. vehicles that allowed them to emit up to 40 times legally allowable emissions.

VW was sentenced in April after pleading guilty in the emissions scandal. In total, VW has agreed to spend up to $25 billion in the U.S. to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting U.S. vehicles.

Last month, Daimler said investigations by authorities of diesel emissions and auxiliary emission control devices could lead to significant penalties and recalls.

The U.S. Justice Department, EPA, California Air Resources Board and a prosecutor in Stuttgart, Germany, are investigating emissions of Mercedes-Benz diesel vehicles.

In March, the Stuttgart prosecutor launched an investigation against Daimler employees on suspicion of fraud and misleading advertising tied to vehicle emissions.

The company told Automotive News in October that it planned to seek approval to sell four U.S. Mercedes diesel models for the 2017 model year. Last year, Mercedes-Benz offered four U.S. diesel models.

In April, Dietmar Exler, CEO of Mercedes-Benz USA, told reporters the company had not made a decision "one way or the other" on the future of U.S. diesel sales.

Moran said diesel vehicles in the U.S. in 2016 accounted for less than 1 percent of U.S. sales and the company could still opt to seek 2017 certification at a later date. The company is "leaving the door open to offer diesels as a potential option in our passenger cars and SUVs."

Daimler won approval in late April to sell U.S. diesel Sprinter commercial vans after months of talks with regulators.

In January, the EPA and CARB accused Fiat Chrysler Automobiles of illegally using software to allow excess diesel emissions from 104,000 U.S. trucks and SUVs. Regulators have refused to grant FCA approval to sell 2017 U.S. diesel models.

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Kinda surprising, given that VW pretty much sold out their inventory of new 2015 TDIs in a couple weeks with no advertising.

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Cadillac’s Diesel Program Is Moving Forward, Unaffected by Opel Sale

Car & Driver  /  May 10, 2017

Cadillac’s diesel program, which we’ve been reporting on for the last couple of years, remains firmly on track, Car and Driver has recently learned. The luxury and performance brand has been working on four- and six-cylinder diesel engines for several upcoming models, but the sale of General Motors’ European subsidiary Opel to the French PSA conglomerate, itself a maker of diesel engines, had cast doubt on Cadillac’s future plans. That’s because the new engines were supposed to be shared with future Opel models, and developing diesel engines solely for Cadillac would be far too costly.

But the future of the new engine generation is secured: Opel cars will still be fitted with the new generation of GM diesel engines. The supply agreements are in place, and development has progressed far down the path to production. “The diesel program has been affected, but not catastrophically,” we were told.

The four- and six-cylinder diesels are earmarked for several of Cadillac’s upcoming crossover/SUV models, and they are sorely needed to help the brand make a more meaningful impact on the market in Europe. In the premium-SUV segment there, the take rate for diesels still far exceeds that for gasoline engines.

And Cadillac may still bring those diesels to the United States. The brand will continue to monitor diesel offerings from BMW and Mercedes-Benz as well as GM’s own Chevrolet Cruze diesel. Audi, Porsche, and VW have yanked their V-6 TDI engine from the U.S. market in the wake of the VW Group’s diesel emissions-cheating scandal, leaving a gap waiting to be exploited by the competition.

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Volvo CEO says new generation of diesel engines could be the last

Reuters  /  May 17, 2017

Volvo's latest generation of diesel engines could be its last because the cost of reducing emissions of nitrogen oxide is becoming too expensive, CEO Hakan Samuelsson was quoted as saying on Wednesday.

[Volvo Car CEO Hakan Samuelsson is a former Scania executive vice president, 1977-2000]

"From today's perspective, we will not develop any more new generation diesel engines," Samuelsson told German newspaper Frankfurter Allgemeine Zeitung in an interview.

However, a Volvo spokesman said on Wednesday that Samuelsson had been discussing options rather than a firm plan to stop the further development of diesel engines.

Samuelsson later said in a statement emailed to Reuters he believed diesel would still play a crucial role in the next few years in helping the company meet targets to reduce emissions of carbon dioxide, being more fuel-efficient than petrol engines.

"We have just launched a brand new generation of petrol and diesel engines, highlighting our commitment to this technology. As a result, a decision on the development of a new generation of diesel engines is not required," he said.

In the FAZ interview Samuelsson said Volvo would continue improving the current range, first introduced in 2013, to meet future emissions standards, with production likely to go on until about 2023.

And until 2020 he said diesel would be needed to help meet carbon dioxide emission limits set by the European Union, but after that other regulations would come into play, with the costs of making engines compliant with ever higher anti-pollution standards meaning it would no longer be worth it.

Instead, Volvo will invest in the electric and hybrid cars, with its first pure electric model due on the market in 2019.

"We have to recognize that Tesla has managed to offer such a car for which people are lining up. In this area, there should also be space for us, with high quality and attractive design," Samuelsson said.

Samuelsson has previously said that tighter emissions rules will push up the price of diesel-engined cars to the point where plug-in hybrids will become an attractive alternative.

The average carbon dioxide emissions limit for European carmakers' fleets will need to fall from 130 grams per kilometer to 95 grams in 2021, forcing them to invest more in exhaust emissions technology.

Diesel cars account for over 50 percent of all new registrations in Europe, making the region by far the world's biggest diesel market. Volvo, owned by China's Geely, sells 90 percent of its XC 90 SUVs in Europe with diesel engines.

The scandal over Volkwagen's cheating of U.S. environmental tests to mask emissions of nitrogen oxides, which can cause or aggravate respiratory disease, means manufacturers are facing intense scrutiny over the true level of pollutants being emitted by their cars.

Goldman Sachs believes a regulatory crackdown could add 300 euros ($325) per engine to diesel costs that are already some 1,300 euros above their gasoline-powered equivalents, as carmakers race to bring real NOx emissions closer to their much lower test-bench scores.

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U.S. Prepares Lawsuit Over Fiat Chrysler Diesel Emissions

Bloomberg  /  May 18, 2017

The U.S. Justice Department is preparing to sue Fiat Chrysler Automobiles NV if talks fail to resolve differences over the automaker’s alleged violations of U.S. clean-air rules with its diesel vehicles, according to two people briefed on the matter.

A lawsuit could be filed as soon as this week, said the people, who asked not to be identified discussing the confidential matter. Negotiations are still ongoing and the parties may reach an agreement to avoid prolonged litigation. A suit would mark an escalation of the U.S. government’s months-long inquiry and could expose the automaker to significant penalties.

The suit being prepared alleges the company used illegal defeat devices, one of the people said. Such devices -- software in computerized systems -- improperly disable pollution controls to enhance performance. Volkswagen AG admitted in 2015 to using defeat devices that turned on emissions controls to pass tests but turned them off during driving.

Fiat Chrysler is adamant that its controls weren’t designed to cheat emissions tests like Volkswagen’s. Investigators have said Fiat Chrysler hasn’t been able to fully explain the purpose of all the functions to their satisfaction.

“In the case of any litigation, FCA US will defend itself vigorously, particularly against any claims that the company deliberately installed defeat devices to cheat U.S. emissions tests,” Fiat Chrysler said in an emailed statement. “The company believes that any litigation would be counterproductive to ongoing discussions with the U.S. Environmental Protection Agency and the California Air Resources Board.”

Fiat Chrysler has been seeking approval for updated software for 2017 model year diesels that it then intends to install in 2014-2016 vehicles cited by the EPA in a Jan. 12 violation notice.

Court Hearing

The U.S. has been preparing a potential complaint ahead of an initial hearing for separate lawsuits, brought by owners of the diesel SUVs and pickups, on May 24 at the U.S. District Court for the Northern District of California. The San Francisco court oversaw VW emissions litigation.

Volkswagen’s defeat devices permitted its diesel cars to pass emissions tests even as they exceeded pollution standards on the road. Regulators stepped up testing in the wake of that scandal, leading to the discovery of Fiat Chrysler’s alleged violations.

Prior story: Fiat Chrysler Accused of Diesel Emissions Cheating by U.S.

Spokespeople for the Justice Department and EPA declined to comment.

The EPA alleged in January that the automaker sold 104,000 Jeep Grand Cherokee SUVs and Ram 1500 pickups with diesel engines containing “auxiliary emissions control devices” that the company failed to disclose to the agency.

EPA’s Notice

In the notice of violation, the agency also said that one or more of the undisclosed emissions controls may be defeat devices and challenged the automaker to convince investigators otherwise.

Some of the controls “appear to cause the vehicle to perform differently when the vehicle is being tested than in normal operation and use,” the EPA said in its notice. Test data showed that the vehicles produced high levels of nitrogen oxide pollution under certain conditions, the agency said in January.

The alleged violations carried potential penalties of up to $44,539 per vehicle, then-EPA enforcement chief Cynthia Giles said at the time. That translated to a penalty of up to $4.6 billion based on the number of vehicles involved.

Prior story: Fiat Chrysler Said to Face U.S. Criminal Emissions Probe

Fiat Chrysler Chief Executive Officer Sergio Marchionne denied the allegations on a Jan. 12 conference call. “We have no defeat devices,” he said.

Possible Mistakes

Marchionne addressed the issue again last month. “We may have made mistakes” on diesel software disclosure, he said, though Fiat Chrysler “never tried to break any rule.”

The EPA said in January that Fiat Chrysler’s lack of disclosure by itself constituted a Clean Air Act violation, adding that it may find additional violations. Auxiliary emissions control devices are permitted under the Clean Air Act as long as they’re disclosed and explained in detail within applications carmakers file with the EPA.

QuickTake Q&A: Volkswagen Embarks on Life After Diesel Scandal

Fiat Chrysler and EPA officials have been in talks to resolve the issues since January, and those talks continue, one of the people said.

At the same time, the automaker has been working to obtain EPA certifications for its 2017 model year diesel Jeep Grand Cherokee and Ram 1500, which the agency has thus far refused to grant.

Volkswagen admitted to using defeat devices on about a half million vehicles to pass U.S. emissions tests. Its then-CEO Martin Winterkorn resigned and the company has committed to spending more than $24.5 billion to cover costs stemming from the scandal, including a $2.8 billion criminal penalty as part of a guilty plea agreement reached in January with the Justice Department.

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EU launches legal action against Italy over Fiat emission tests

Reuters  /  May 17, 2017

BRUSSELS -- The European Commission launched legal action against Italy for failing to respond to allegations of emissions-test cheating by Fiat Chrysler, in a procedure that could lead to the country being taken to court.

"The Commission decided today to send a letter of formal notice asking Italy to respond to concerns about insufficient action taken regarding the emission control strategies employed by Fiat Chrysler Automobiles," the Commission said in a statement on Wednesday.

The Commission has been mediating a dispute between Rome and Berlin after Germany accused Fiat Chrysler of using an illegal device in diesel versions of its Fiat 500X, Fiat Doblo and Jeep Renegade models. That mediation ended in March.

EU officials have become increasingly frustrated with what they see as governments colluding with the powerful car industry and the legal move is the biggest stick the European Commission has available to force nations to clamp down on diesel cars that emit high levels of polluting nitrogen oxide (NOx).

EU regulators say Italy has failed to convince them that the so-called defeat devices used to modulate emissions on its vehicles outside of narrow testing conditions are justified.

Defeat devices have been illegal under EU law since 2007. Their use has come under renewed scrutiny following Volkswagen's admission that it used software to mask real-world NOx emissions, which are blamed for respiratory illnesses and early deaths.

European carmakers have argued they are not doing anything wrong, citing an exemption that allows them to turn off emission control systems when necessary for safety or to protect engines.

Last December, the Commission launched cases against five nations, including Germany, Britain and Spain, for failing to police the car industry adequately. Despite the accusations leveled against its own carmakers, Germany has accused Fiat Chrysler of using an illegal device to scale back emission controls after 22 minutes -- just longer than official tests.

Under the current EU type approval system, which the Commission is trying to overhaul, national regulators approve new cars and alone have the power to police manufacturers. But once a vehicle is approved in one country, it can be sold throughout the bloc.

Earlier on Wednesday Italy's Transport Minister, Graziano Delrio, had asked for a delay in starting the infringement procedure to allow time for clarification on the issues raised by the Commission.

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FCA to modify diesel engines to thwart U.S. suit over emissions levels

Bloomberg  /  May 19, 2017

WASHINGTON -- Fiat Chrysler Automobiles filed a proposed fix to about 104,000 diesel engines that the carmaker predicts will resolve negotiations with the Justice Department and other U.S. regulators over emissions levels.

The automaker also applied for diesel-vehicle emissions certification Friday for the 2017 Jeep Grand Cherokee SUV and Ram 1500 pickup, according to a statement.

Fiat Chrysler is seeking permission from the EPA and the California Air Resources Board (CARB) to sell the SUVs and trucks after updating emissions software calibrations. 

The filing is the culmination of four months of work with the EPA and CARB after the federal regulator alleged the automaker had installed software in 2014-16 model-year editions of the diesel vehicles that violated clean-air rules. The company plans to make the same modification to the emissions-control software in those model-year vehicles that it’s applied to deploy for 2017 vehicles, if regulators approve. 

The Justice Department has been preparing to sue FCA if talks fail to resolve differences over the automaker’s alleged violations, two people briefed on the matter said this week. Fiat said in its statement it “believes that these actions should help facilitate a prompt resolution” with the Justice Department.

An EPA spokeswoman refused to comment, citing the agency’s policy to avoid discussing the certification status of vehicles not yet approved for sale. Wyn Hornbuckle, a Justice Department spokesman, refused to comment. 

Fiat Chrysler’s U.S.-listed shares rose 0.3 percent to close at $10.50 in New York. The stock has climbed 18 percent this year.

U.S. regulators have put greater scrutiny on diesel models after Volkswagen AG admitted in 2015 to using defeat devices that turned on emissions controls to pass tests but turned them off during driving.

Daimler AG’s Mercedes-Benz this month halted efforts to get approval for 2017 diesel versions of models including the C-class sedan and GLE SUV, citing an arduous certification process that wasn’t justified given demand for the vehicles.

FCA CEO Sergio Marchionne denied the EPA’s allegations in January and said last month Fiat Chrysler may have unintentionally made mistakes.


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50 minutes ago, kscarbel2 said:

FCA CEO Sergio Marchionne denied the EPA’s allegations in January and said last month Fiat Chrysler may have unintentionally made mistakes.


Sounds like the same as VW.   A rotten, defective corporate culture extending to the top echelon of the company.  No regrets about cheating, only regret is getting caught.  Think of the corporate leaders you have known and those you admire.  Would they have done such things?  

The EPA should:

a. require these bastards to gather up the non-conforming vehicles from across the U.S. and ship them to the country of their corporate headquarters.  Or alternative, have every single one of them crushed here in the U.S. under EPA supervision.

b. refund 100% of the purchase price to the retail owners

c.  pay a fine that is more than a slap on the wrist.


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Fiat Chrysler sued by U.S. over excess diesel emissions

Reuters  /  May 23, 2017

WASHINGTON -- The U.S. government has filed a civil lawsuit accusing Fiat Chrysler Automobiles of using software to bypass emission controls in diesel vehicles.

The U.S. Justice Department suit, filed in U.S. District court in Detroit, is a procedural step that may ramp up pressure on Fiat Chrysler.

Fiat Chrysler has denied any wrongdoing.

FCA said in a statement that it is reviewing the complaint. It has been working with the EPA and California regulators to clarify issues related to emissions control technology in the 2014-2016 Jeep Grand Cherokee and Ram 1500 diesel vehicles.

The automaker said it is "disappointed" that the government chose to file the lawsuit.

"The company intends to defend itself vigorously, particularly against any claims that the Company engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests," the statement said.

FCA shares fell 4.1 percent to close at $10.32 on Tuesday.

The suit also names Fiat Chrysler's diesel engine unit V.M. Motori SpA, which designed the engine in question.

Reuters reported last week the Justice Department and EPA have obtained internal emails and other documents written in Italian that look at engine development and emissions issues that raise significant questions. The investigation has scrutinized VM Motori. 

FCA acquired a 50 percent stake in VM Motori in 2010 and the remainder in October 2013.

The lawsuit states that FCA placed undeclared "defeat devices," or auxiliary emissions controls, in 2014-2016 Fiat Chrysler diesel vehicles that led to "much higher" than allowable levels of nitrogen oxide, or NOx pollution, which is linked to smog formation and respiratory problems.

The suit seeks injunctive relief and unspecified civil penalties.

EPA said in January the maximum fine is about $4.6 billion.

Fiat Chrysler faces a separate ongoing criminal investigation on the emissions same issue by the Justice Department and probes by the U.S. Securities and Exchange Commission and many U.S. states.

In January, EPA and California accused Fiat Chrysler of illegally using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks. 

Fiat Chrysler said on Friday it plans to update software that it expects will resolve the concerns of U.S. regulators about excess emissions in those vehicles.

The January notice was the result of regulators' investigation of rival Volkswagen, which prompted the government to review emissions from all other passenger diesel vehicles.

Fiat Chrysler has applied for certification to sell 2017 diesel models from U.S. and California regulators and said it was in talks to win approval for a software update to address regulators' concerns about emissions in vehicles on the road.

The software update would begin rolling out once the EPA and California Air Resources Board (CARB) approved it, Fiat Chrysler said Friday. FCA says it does not anticipate any impact on performance or fuel efficiency.

A federal judge in California set a Wednesday hearing on a series of lawsuits filed by owners of vehicles and some dealers against Fiat Chrysler.


U.S. Sues Fiat Chrysler, Accusing It of Using Software to Pass Emissions Tests

The New York Times  /  May 23, 2017

The federal government filed a lawsuit against Fiat Chrysler Automobiles on Tuesday, accusing it of using illegal engine-control software to enable its diesel-powered vehicles to pass emissions tests.

The filing occurred days after Fiat Chrysler proposed a modification to the software to ensure correct test results in hopes of resolving the issue.

In a statement, the automaker said it was disappointed by the action and would defend itself against any claims that its software represents a “deliberate scheme to install defeat devices to cheat U.S. emissions tests.”

The Environmental Protection Agency accused Fiat Chrysler in January of installing the software on about 104,000 Ram pickup trucks and Jeep Grand Cherokee sport utility vehicles sold from 2014 through 2016.

Continue reading the main story

In its complaint on Tuesday, the Justice Department noted that the engine controls in the Ram trucks and Jeeps are different from what are described in paperwork the company filed with the E.P.A.

The features of the software, it said, “alone or in combination with one or more of the others, bypass, defeat and/or render inoperative” the vehicles’ emission control system, causing them to emit “emit substantially higher levels” of nitric oxide than allowed.

United States officials view the Fiat Chrysler matter as less serious than Volkswagen, and stopped short of accusing the company of intentionally engineering the software to cheat on emissions tests. Filing the suit is seen as an effort to accelerate settlement negotiations, after the company outlined its proposal last Friday to reset the engine software in the affected vehicles.

The suit was filed by the Justice Department’s environmental enforcement section in United States District Court for the Eastern District of Michigan.

The emissions issue has essentially stopped Fiat Chrysler’s domestic sales of diesel-powered Ram trucks and Grand Cherokees. In 2015 and 2016, the company sold more than 50,000 diesel Ram pickups a year in the United States, making it by far the largest-selling diesel-powered light vehicle in the country.

But the company has been unable to sell diesel vehicles in the United States for the current model year because the E.P.A. has not certified that they meet emissions regulations.

Before any resumption of sales, the E.P.A. would have to test and approve the new engine software that the company has developed, a process that could take weeks or months.

Once the software is certified, Fiat Chrysler could alert owners to the update by a recall or possibly a less formal customer-service campaign. The method will be determined in negotiations with the E.P.A. Either way, customers would be notified by mail and other means to bring their vehicles to a dealer to have the software updated at no charge.

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GM accused in lawsuit of using VW-like defeat devices

Bloomberg  /  May 25, 2017

GM says it will 'vigorously defend' itself

General Motors was accused of putting defeat devices in its trucks to beat emissions tests, the sixth carmaker linked to diesel cheating scandal since 2015, when Volkswagen AG admitted to installing software to bypass pollution rules.

People who own or lease more than 705,000 GM Duramax diesel trucks filed a lawsuit Thursday, claiming GM installed multiple such devices in two models of heavy-duty trucks from 2011 to 2016. The 190-page complaint is littered with 83 references to VW, and asserts that the environmental damage caused by each truck could surpass that of the German automaker’s vehicles.

GM’s cheating allowed its trucks to pass U.S. inspections, even while they spewed emissions two to five times the legal limit under regular driving conditions, according to the complaint filed in U.S. District Court in Detroit.

"These claims are baseless and we will vigorously defend ourselves," GM said in a statement. "The Duramax Diesel Chevrolet Silverado and GMC Sierra comply with all U.S. EPA and CARB emissions regulations."

The company's shares fell 1.8 percent to close at $32.60. 

Plaintiffs' lawyers

The lawsuit was filed by several plaintiffs' law firms including Hagens Berman Sobol Shapiro, which was involved in similar litigation against VW and helped reach multibillion-dollar settlements with that automaker.

"GM claimed its engineers had accomplished a remarkable reduction of diesel emissions,” attorney Steve Berman, a managing partner at Hagens Berman, said in the complaint. Berman has also represented drivers and dealerships against Fiat Chrysler Automobiles. “These GM trucks likely dumped as much excess poisonous emissions into our air as did the cheating Volkswagen passenger cars.”

Excessive emissions from the GM vehicles exposed the general public to noxious levels of smog, according to the complaint. Diesel engines, while more fuel efficient, produce greater volumes of nitrogen oxide pollutants, or NOx. During on-road testing the diesel trucks polluted at levels beyond legal limits and higher than their gasoline counterparts, according to the complaint.

The lawsuit, which seeks class-action status, underscores questions about the credibility of clean-diesel technology. This week, the U.S. Justice Department sued Fiat Chrysler, alleging violations of clean-air rules. Daimler AG is the target of a German probe related to diesel emissions, and French carmakers Renault SA and PSA Group are both being investigated in their home country.

Bosch implicated

Technology provider Robert Bosch GmbH, which was named as a co-defendant by consumers who sued VW, is also defendant in the GM case, described in the complaint as “an active and knowing participant in the scheme to evade” emissions standards.

A Bosch representative didn’t immediately respond to a request for comment on the GM suit.

Representatives of the Justice Department and the Environmental Protection Agency didn’t immediately respond to requests for comment.

Barclays Capital, in a report issued after the lawsuit became public, said the risk of GM having to issue a stop-sale order on the trucks appears to be low.

"Given this is coming from a class action litigation firm, it could just be ‘fishing’ for a settlement around charges of deceptive advertising," the report said. "We’d only know that it’s more serious if the EPA steps in, as they did in the cases of FCA and VW."

But the analysts authoring the report said they "have a tough time seeing this issue easily fading away, which could add an overhang to GM stock on top of cycle and secular disruption concerns."

The case is Fenner v. General Motors LLC, 17-cv-11661, U.S. District Court, Eastern District of Michigan (Detroit).

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Software update can fix diesel emissions, FCA lawyer says

Reuters  /  May 24, 2017

WASHINGTON -- Fiat Chrysler Automobiles NV believes a software update can address U.S. regulators' contention that its diesel vehicles are producing excess emissions, a lawyer for the company said at a court hearing on Wednesday.

The lawyer admitted no wrongdoing by the Italian-American automaker, however.

The Justice Department filed a civil suit on Tuesday accusing Fiat Chrysler of illegally using software to bypass emission controls in 104,000 2014-16 diesel and labeled the software "defeat devices."

Robert Giuffra, a lawyer representing Fiat Chrysler, said at a hearing in San Francisco that regulators' concerns could be resolved with new software without a need for any new hardware.

Giuffra said the company does not concede that the 104,000 vehicles emitted excess emissions. He said there were very complicated regulations governing whether auxiliary emissions control devices should have been disclosed to regulators.

Regulators could approve the company's proposed software update very quickly as part of certifying 2017 diesel models to allow them to go on sale, potentially in a few weeks, Giuffra said. He added that he expects the same fix will address concerns for the 104,000 2014-16 vehicles.

A Justice Department lawyer, Joseph Warren, said a decision could take longer, but said the government wants to move quickly.

The EPA and California Air Resources Board accused Fiat Chrysler in January of illegally using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-16 Jeep Grand Cherokees and Dodge Ram 1500 trucks in a notice of violation.

Fiat Chrysler said in a statement it does not believe the software update would impact performance or fuel efficiency.

The notice was the result of a probe that arose out of regulators' investigation of rival Volkswagen AG's excess diesel emissions.

U.S.-listed Fiat Chrysler shares, which fell 4.1 percent on Tuesday, closed up 2.3 percent in trading Wednesday to $10.56.

Fiat Chrysler faces more than 20 lawsuits from dealers and owners over the alleged excess emissions.

U.S. District Judge Edward Chen said at the hearing he would not delay numerous civil suits. He is also overseeing suits filed against Robert Bosch stemming from its role in developing the Fiat Chrysler diesel engines.

"The public interest demands that we move forward quickly," Chen said.

Chen has scheduled hearings in June to pick lead attorneys to represent owners and to name a settlement master.

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International team uncovers mechanisms of VW, Fiat Chrysler software defeat device code

Green Car Congress  /  May 24, 2017

An international team of researchers has uncovered the mechanisms of two families of software defeat devices for diesel engines: one used by the Volkswagen Group to pass emissions tests in the US and Europe, and a second found in Fiat Chrysler Automobiles. To carry out the analysis, the team developed new static analysis firmware forensics techniques necessary automatically to identify defeat devices and confirm their function.

After testing some 900 firmware images, the researchers were able to detect a potential defeat device in more than 400 firmware images spanning eight years. Both the Volkswagen and Fiat vehicles use the EDC17 diesel ECU manufactured by Bosch, the researchers noted. Using a combination of manual reverse engineering of binary firmware images and insights obtained from manufacturer technical documentation traded in the performance tuner community, the researchers identified the defeat devices used, how the devices inferred when the vehicle was under test, and how that inference was used to change engine behavior. “Notably,” the team wrote in a paper presented at the 38th IEEE Symposium on Security and Privacy this week, “we find strong evidence that both defeat devices were created by Bosch and then enabled by Volkswagen and Fiat for their respective vehicles.

During current emissions standards tests, cars are placed on a chassis equipped with a dynamometer. The vehicle follows a precisely defined speed profile that tries to mimic real driving on an urban route with frequent stops. The conditions of the test are both standardized and public. This essentially makes it possible for manufacturers to intentionally alter the behavior of their vehicles during the test cycle. The code found in Volkswagen vehicles checks for a number of conditions associated with a driving test, such as distance, speed and even the position of the wheel. If the conditions are met, the code directs the onboard computer to activate emissions curbing mechanism when those conditions were met.

Electronic engine control has also made it easier to circumvent emissions testing by implementing a defeat device in software. The black box nature of emissions testing makes it nearly impossible to discover such a software-based defeat device during a test, forcing regulators to rely on heavy fines to discourage cheating. Unfortunately, as the Volkswagen case illustrates, it can take many years to discover such a defeat device. Given the ultimate limitations of testing, we are led to consider whether we can detect defeat devices using software verification techniques. Unfortunately, verifying complex software systems is a difficult problem in its own right, more so for a cyber-physical system like a modern automobile. In our case, the setting is also adversarial—rather than trying to find bugs, we are looking for intentional attempts to alter a system’s behavior under test conditions. This paper aims to be a first step in cyber-physical system verification in an adversarial setting with two case studies of automobile defeat devices and binary analysis techniques to identify verification- critical code elements across multiple software revisions.

—Contag et al.

Computer scientist Kirill Levchenko led the research effort at UC San Diego. The work, supported by the European Research Council and by the US National Science Foundation (NSF), started when computer scientists at Ruhr University, working with independent researcher Felix Domke, teamed up with Levchenko and the research group of computer science professor Stefan Savage at the Jacobs School of Engineering at UC San Diego.

Savage, Levchenko and their team have extensive experience analyzing embedded systems, such as cars’ onboard Engine Control Units for vulnerabilities. The team examined 900 versions of the code and found that 400 of those included information to circumvent emissions tests.

A specific piece of code was labeled as the “acoustic condition”—ostensibly, a way to control the sound the engine makes. But in reality, the label became a euphemism for conditions occurring during an emissions test. The code allowed for as many as 10 different profiles for potential tests. When the computer determined the car was undergoing a test, it activated emissions-curbing systems, which reduced the amount of nitrogen oxide emitted.

The Volkswagen defeat device is arguably the most complex in automotive history.

—Kirill Levchenko

Researchers found a less sophisticated circumventing ploy for the Fiat 500X. That car’s onboard computer simply allows its emissions-curbing system to run for the first 26 minutes and 40 seconds after the engine starts—roughly the duration of many emissions tests.

We implemented our approach in a tool called CURVEDIFF. Given that we perform an intra-procedural analysis, we might miss certain ways how a defeat device can be implemented and an inter-procedural analysis could enhance the soundness of our implementation. Furthermore, our analysis can be extended to take more primitive building blocks such as timers and multiplexers into account to deepen the knowledge about the relation of various components in the detection logic.

—Contag et al.

The study draws attention to the regulatory challenges of verifying software-controlled systems that may try to hide their behavior and calls for a new breed of techniques that work in an adversarial setting.

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Bosch tied to diesel-cheating claims against fourth carmaker

Bloomberg  /  May 26, 2017

Robert Bosch GmbH, the world’s largest auto-parts supplier, was linked to emissions-cheating allegations against a fourth automaker on Thursday, raising questions about the German company’s role in the scandal gripping the car industry.

Bosch and General Motors are co-defendants in a lawsuit filed Thursday by owners of diesel-powered pickups who accused the automaker of using illegal software, known as a defeat device, to pass U.S. emissions tests. Bosch “participated not just in the development of the defeat device, but in the scheme to prevent U.S. regulators from uncovering the device’s true functionality,” according to the lawsuit filed in Detroit federal court.

“We believe Bosch was the enabler,” said attorney Steve Berman, a managing partner at Hagens Berman who’s represented vehicle owners in lawsuits against all four carmakers and Bosch over diesel cheating. “They provided the software in a format where manufacturers and Bosch could work together to calibrate their engines to cheat emissions tests.”

The technology was so sophisticated that it could recognize when a car was being tested in a lab or smog station to feign clean emissions and compliance with pollution standards, according to U.S. regulators.

“Bosch takes the allegations of manipulation of the diesel software very seriously,” the Stuttgart-based parts supplier said in an emailed statement. “Bosch is cooperating with the continuing investigations in various jurisdictions, and is defending its interests in the litigation.”

It’s the fourth time in less than two years that automakers using Bosch’s diesel engine software have been accused in court by regulators or vehicle owners of cheating on emissions tests. On Tuesday, the U.S. Justice Department accused Fiat Chrysler Automobiles -- which also uses Bosch engine software -- of rigging its cars to pass emissions tests.

GM spokesman Pat Morrissey said Thursday’s suit is “baseless” and its vehicles comply with environmental standards. FCA said on Tuesday that it “intends to defend itself” in the Justice Department lawsuit and denied any willful wrongdoing.

Another Bosch user, Volkswagen AG, admitted in 2015 to flouting pollution rules and has committed to spending more than $24.5 billion paying fines and penalties, including buybacks, across North America. Car owners also alleged in a 2016 lawsuit that Daimler AG’s Mercedes-Benz used defeat devices. That lawsuit was thrown out but then amended and re-filed in December, adding Bosch as a defendant.

Merecedes-Benz has denied any wrongdoing, but earlier this year suspended seeking certification for 2017 diesel vehicles citing the “significant increase in effort” needed to win approval from the U.S. Environmental Protection Agency.

In each case, the vehicles used Bosch’s EDC-17 control unit, a computer used to regulate the diesel engine’s operation and control emissions, according to the GM lawsuit. That chip is “a good enabler for manufacturers to employ defeat devices as it enables the software to detect conditions when emissions controls can be detected,” according to the lawsuit.

“Although this case is not about Volkswagen, Bosch’s history with Volkswagen provides background and support for its participation” in the racketeering “of which Bosch and GM were participants,” the GM truck owners claimed.

In the VW case, vehicle owners accused Bosch of being “an active participant in a massive, decade-long conspiracy with VW,” according to court filings. Bosch didn’t admit wrongdoing but agreed to pay $327.5 million to end the class-action in February.

“After diligently balancing all aspects, we decided to settle in this case,” Bosch CEO Volkmar Denner said at the time in a statement. “Bosch is in the middle of the biggest transformation of the company’s history. We want to devote all our attention and resources to that change.”

Bosch faces an investigation by the U.S. Justice Department into possible criminal charges, people familiar with the matter said in September. German prosecutors are looking into whether Bosch employees helped VW rig software. Stuttgart prosecutors said Friday that they’re also investigating Bosch in relation to a probe of Daimler, which was the subject of police raids across Germany earlier this week, and a spokesman at the supplier said the company is cooperating.

In the FCA lawsuit, now pending in U.S. District Court in San Francisco, Bosch and the carmaker are alleged to have installed software to manipulate the emissions control systems when the car was in testing.

“Rather than finding a way to improve performance while maintaining the emissions control system,” the companies conspired to hide the actual level of pollutants, according to one of the 20 pending complaints against Fiat Chrysler, many of which also name Bosch as a defendant.

FCA has proposed a software update to the EPA which attorneys say is capable of resolving the dispute “in a matter of weeks.” It would minimize or eliminate any need for payment of monetary damages to plaintiffs, the company said. Bosch has yet to issue a written reply to the claims, but supported the carmaker’s efforts to produce a fix.

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Bosch software enabled emissions cheating by VW, FCA

Bloomberg  /  June 9, 2017

WASHINGTON -- A study alleges that Robert Bosch Gmbh created the software that enabled Volkswagen AG to evade diesel emissions standards for years.

Technical documents also indicate Bosch code was used in a so-called defeat device for a Fiat Chrysler Automobiles model, according to a year-long study by researchers at the University of California, San Diego and Ruhr-Universitat Bochum in Germany. That software set one mode for when a vehicle is being tested -- but then allowed tailpipe pollution to spike in real-world driving conditions.

"We find strong evidence that both defeat devices were created by Bosch and then enabled by Volkswagen and Fiat for their respective vehicles," the study said, citing technical documents.

In a statement, Bosch declined to comment on the study, citing "the sensitive legal nature of these matters," adding that it would "not comment further concerning matters under investigation and in litigation." Bosch has previously rejected as "wild and unfounded" claims from vehicle owners that its employees conspired with VW to conceal defeat-device software.

The authors of the study, “How They Did It: An Analysis of Emission Defeat Devices in Modern Automobiles,” reached their conclusions by analyzing technical documents bearing Bosch copyright notices, which were posted on a VW portal maintained for repair shops and websites for enthusiasts who alter their engine’s software. The authors acknowledged that the documents were not provided or verified by Bosch and that automakers ultimately decide how to use the pollution-control software in their vehicles.

"Since we did not obtain the function sheets directly" from Bosch, the researchers wrote in their study, released May 22, "we cannot be absolutely certain of their authenticity."

Bosch, the world’s largest auto-parts supplier, provides engine-control software to manage diesel emissions systems, offering computer precision to fine-tune those historically dirtier engines.

The company has had varying degrees of involvement in engine development work done by its automaker customers, ranging from simply providing software to hands-on technical collaboration, according to Daniel Carder, director of West VirginiaUniversity’s Center for Alternative Fuels Engines and Emissions.

Carder, who was part of the team that first identified VW’s diesel cheating, said Bosch’s software allowed engineers to tune engine performance with far more precision than previously possible. 

Bloomberg News reported in September that the U.S. Justice Department was widening its criminal investigation into VW to probe whether Bosch conspired with the carmaker to evade U.S. pollution tests. Bosch declined to comment at the time.

More allegations

VW has admitted to installing some 11 million diesel vehicles worldwide with defeat device software that could limit pollution during lab tests while exceeding legal limits on the road. FCA was accused by the Justice Department last month of using defeat devices in Jeep SUVs and Ram pickups, which use Bosch software. FCA denied wrongdoing and says it will defend itself vigorously against the allegation that it sought to cheat.

Bosch was not named as a defendant in the complaint. Fiat Chrysler "frequently engaged in discussions with Bosch regarding calibrations," of the software, the Justice Department said in the complaint.

While the VW and FCA defeat devices analyzed in the study are different from one another, they both allow vehicles to limit nitrogen oxide emissions during laboratory tests while allowing the vehicles to emit higher levels of tailpipe pollution in real-world driving, according to the study. The Bosch-copyrighted documents illustrate how the defeat devices could spot telltale signs of an emissions test, according to Kirill Levchenko, a UC-San Diego computer scientist and an author of the study.

"It’s a diagram of a defeat device," Levchenko said, referring to the Bosch schematic design.

The study was supported by the European Research Council and by the U.S. National Science Foundation. It was prepared for an Institute of Electrical and Electronics Engineers Symposium on Security and Privacy in San Jose last month.

Widening investigation

The study’s findings add to scrutiny already surrounding the extent of the Stuttgart, Germany-based Bosch’s involvement in the suspect diesel systems. Bosch has been named as a co-defendant in class-action lawsuits filed by owners of diesel vehicles made by VW, Fiat Chrysler, Daimler AG’s Mercedes-Benz and, most recently, General Motors. In January, Bosch agreed to a $327.5 million settlement with VW owners; it admitted no wrongdoing. 

U.S. vehicle owners accused Bosch of conspiring with the automaker to develop and conceal the defeat device software. In 2008, Bosch also asked VW to shield it from legal liability stemming from the use of its software, lawyers representing owners of VW diesels claimed in court filings last September. Bosch declined to comment on the letter at the time.

The Bosch-copyrighted schematics, reproduced in the study, diagram how the VW vehicles detected when they were being tested and limited pollution emissions to permissible levels. When the cars weren’t being tested, they released the smog-forming pollutants at up to 40 times the permitted levels, according to the U.S. Environmental Protection Agency.

Separately, the researchers say they discovered code on a diesel Fiat 500x crossover that is sold in Europe but not the U.S. that "amounts to a defeat device." In the Bosch-copyrighted documents, one pollution-control path is called "real driving" and the other is labeled "homologation," a term used for the process of certifying that a product meets regulatory standards.

The testing mode directs the storage catalyst to limit nitrogen oxide emissions more aggressively than in the "real driving" mode. The stricter pollution controls are suspended after a little more than 26 minutes, which is the length of many emissions tests, Levchenko said.

An FCA spokesman declined to comment, and referred to written comments the company delivered last fall for a European Parliament committee hearing into allegations that the 500x deactivated emissions controls after 22 minutes. 

"Our vehicles do not detect that they are being tested," the company said at the time. "They also do not deactivate the emission control systems after 22 minutes after cranking, contrary to allegations."

Regulators in Italy and Germany have been trading blows in a months-long dispute over the existence of defeat devices in Fiat Chrysler vehicles, including the 500x. Germany has accused the company of using defeat devices while Italian regulators say their testing reveals no such cheating.

The spat escalated last month when the European Commission opened a proceeding into whether the Italian regulators properly granted emissions approval to the Fiat Chrysler diesels.


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Fiat Chrysler diesels spew excess pollution, VW sleuths report

Bloomberg  /  June 13, 2017

West Virginia researchers shed new light on FCA cheating allegations

WASHINGTON -- Fiat Chrysler diesel vehicles spewed pollution as much as 20 times the legal limit, according to testing by the same researchers who first recorded the excess emissions in Volkswagen AG’s diesel cheating scandal.

The revelation from a West Virginia University laboratory sheds new light on the U.S. Justice Department’s allegations in a civil lawsuit last month that Fiat Chrysler Automobiles has used illegal "defeat devices," software that helps evade emissions tests. It comes amid growing concerns about the ability of diesel engines to satisfy U.S. emissions limits and the extent to which automakers may be working to navigate around them.

The West Virginia University’s Center for Alternative Fuels, Engines and Emissions stopped short of accusing Fiat Chrysler of emissions cheating, but said on-road tests of Jeep Grand Cherokee SUVs and Ram 1500 pickups revealed nitrogen oxide levels at three to 20 times what is permitted by U.S. clean-air rules. Nitrogen oxide, or NOx, can cause smog and acid rain.

"We saw emissions results in simulated on-road cycles on chassis dynamometers that were much lower than the actual on-road results were, suggesting that the vehicle was controlled in different fashions," said Daniel Carder, director of the center.

The researchers tested five of the Jeep and Ram models from model years 2014-2015 in laboratories and on the road and using portable equipment to measure emissions. The vehicles emitted NOx levels during on-road tests in excess of U.S. limits. The on-road NOx emissions were also higher than observed in laboratory tests designed to replicate the driving maneuvers in the on-road tests.

Fiat Chrysler, in a statement, said it has asked for more information about how the study was conducted but "this testing appears to have been commissioned by a plaintiffs’ law firm for purposes of litigation."

Carder declined to comment on who commissioned the research.

'No regulatory protocol'

U.S. pollution standards for emissions are based on laboratory testing, so a comparison with on-the-road tests is "invalid," the company said. The researchers’ appear to have obtained some of the results by driving faster and with more weight in the vehicle than the regulators call for, according to the statement.

"Despite the report, there is no regulatory protocol for conducting on-road emissions testing," the company said.

Carder acknowledged that some of the on-road tests were more demanding than U.S. laboratory procedures, such as a test route on a steep ascending road. However, Carder said, "we were seeing elevated NOx levels even on the ascent, which is something we wouldn’t expect."

In its civil lawsuit against Fiat, the U.S. argues that any undisclosed software is illegal and that features within the automaker’s emissions control systems were designed to evade emissions tests. The case focuses on diesel engines in Jeep Grand Cherokee SUVs and Ram 1500 pickups for model years 2014 to 2016, alleging that they generate more emissions in normal driving than during laboratory tests.

Fiat Chrysler CEO Sergio Marchionne has said the automaker never set out to cheat emissions tests. And in a statement last month, the carmaker said it intends to vigorously defend itself "particularly against any claims that the company engaged in any deliberate scheme to install defeat devices to cheat U.S. emissions tests."

Separately, General Motors was sued May 25 for allegedly putting defeat devices in two models of heavy-duty trucks from 2011 to 2016. The class-action suit by owners or lessees of more than 705,000 GM Duramax diesel trucks argues that the vehicles passed U.S. inspections despite spewing emissions two to five times the legal limit.

Central role

The West Virginia center that conducted the recent Fiat Chrysler tests has played a central role in emissions cheating scandals before, having documented outsize emissions as much as 35 times what was expected during testing of Volkswagen vehicles in 2013.

Those tests were commissioned by the not-for-profit International Council on Clean Transportation, a group that works closely with regulators worldwide, and helped drive later lawsuits against Volkswagen.

In the Volkswagen tests, the center monitored emissions by driving vehicles while portable measuring equipment was attached via hoses to their exhaust pipes. Carder declined to discuss other diesel vehicles tested by the West Virginia University lab.

Volkswagen admitted in 2015 that about 11 million diesel cars worldwide were outfitted with so-called defeat devices. A U.S. judge on May 11 approved a $1.225 billion settlement between the German automaker and regulators and will buy back or repair some 560,000 vehicles.

It’s a difficult burden of proof for government and plaintiffs in the FCA lawsuit to "really come up with a smoking gun piece of evidence -- ‘smoking’ the key word here -- that there was in fact intent to cheat the testing for emissions," said Richard Hilgert of Morningstar, who has a buy rating on Fiat Chrysler.

"This is a negotiation," Hilgert said. "We’re going to see some kind of settlement at some point."

Carder said in a telephone interview that finding a "smoking gun" is not the objective of his lab’s diesel tests.

"Our intent is to look at how these emissions controls systems are performing in the real world," Carder said. "We think that’s where it really matters."

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EPA suspected Fiat Chrysler of using 'defeat device' in 2015

Reuters  /  June 16, 2017

WASHINGTON -- The U.S. Environmental Protection Agency (EPA) told Fiat Chrysler Automobiles in November 2015 it suspected some of its vehicles had at least one "defeat device" that improperly bypassed emissions controls, emails disclosed under a public records request on Friday show.

The EPA and California Air Resources Board (CARB) accused Fiat Chrysler in January of using undisclosed software to illegally allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks. Fiat Chrysler did not immediately comment on the public records.

Byron Bunker, director of the EPA's Transportation and Air Quality compliance division, said in a January 2016 email to Fiat Chrysler obtained by Reuters under the Freedom of Information Act that he was "very concerned about the unacceptably slow pace of the efforts to understand the high NOx emissions."

NOx refers to the nitrogen oxides in polluted air.

Bunker's email said the EPA had told Fiat Chrysler officials at a November 2015 meeting that at least one auxiliary emissions control device appears to violate the agency's regulations.

Mike Dahl, head of vehicle safety and regulatory compliance for Fiat Chrysler's U.S. unit, responded in a separate email that the company was working diligently and understood EPA's concerns. He added that if EPA declared vehicles to contain defeat devices, it would result in "potentially significant regulatory and commercial consequences."

Fiat Chrysler said in a statement, meanwhile, that the emails showed it had been "meaningfully engaged with the EPA regarding its diesel engine emissions for an extended period of time."

The documents redacted the vehicles named, but two officials briefed on the matter said they referred to diesel models.

At an event in Venice on Friday, FCA CEO Sergio Marchionne said he was "confident of the fact that there was no intention on our part to set up a defeat device that was even remotely similar to what (Volkswagen) had in their cars."

The Justice Department sued Fiat Chrysler in May, saying it placed eight undeclared "defeat devices," or auxiliary emissions controls, in 2014-2016 Fiat Chrysler diesel vehicles that led to "substantially" higher than allowable levels of nitrogen oxide, which is linked to smog formation and respiratory problems.

It has a separate ongoing criminal probe into the matter.

Marchionne said on Friday he was "confident that we have a solution that is acceptable to EPA and (California) in terms of 2017 certification and as flashback mechanism on all the 2014 to 2016 cars."

The EPA notice was the result of a probe that arose out of regulators' investigation of rival Volkswagen AG's excess diesel emissions.

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Bracing for diesel bans in Europe

Automotive News  /  June 17, 2016

Looming crackdown jeopardizes powertrain plans

Almost 30 years ago, Volkswagen ads introduced the German term fahrvergnuegen to communicate driving enjoyment. But now, because of its cheating on diesel emissions tests, VW has unwittingly helped introduce a new, less flattering term: fahrverbote, or driving ban.

Driving bans loom in Europe as governments in Germany, France and the U.K. crack down on toxic nitrogen oxide emissions from diesels, leaving brands such as VW, Mercedes-Benz and Volvo at risk because they have strategically bet on the powertrain to meet tougher carbon dioxide emissions rules that start to take effect in 2020.

Diesel engines have been a popular European consumer preference. But now, the industry strategy is in jeopardy.

The growing anti-diesel sentiment will make it harder for automakers to meet the European Union's fleet CO2 target of 95 grams per kilometer. Diesels are about 20 percent more fuel efficient than gasoline engines, so they are key to most manufacturers' CO2-reduction strategies. Automakers that miss their CO2 targets face stiff fines.

But demand for diesels, which held steady in the immediate aftermath of VW's scandal, is starting to crumble because of intensifying public scrutiny of the technology, especially in Germany. Stuttgart, the cradle of Germany's auto industry, could even prevent 3-year-old diesels from entering the city limits on certain days starting next year. Following a court order this year, Munich likely will be the next to institute a ban.

That news had an immediate sales effect: Diesels accounted for just 40 percent of Germany's new-car sales in March, down from 45.8 percent a year earlier and a high of 48.1 percent in 2012.

'A catastrophe'

A senior German industry official called the public reaction "a catastrophe."

"The first thing we need to do is get away from this debate over fahrverbote," he said. There will be no solution to cleaning up diesels until after Germany's national election in September, he predicted.

As other governments joined Germany in cracking down on the powertrain, diesel sales fell to 46 percent of the European market for the first three months of 2017, from 50 percent in the first quarter of 2016, according to data from JATO Dynamics.

London's mayor said in mid-February that owners of pre-Euro 4 diesels will face an extra £10 "toxicity charge" when entering the city center starting in October.

BMW has the highest share of diesels in Europe among German luxury brands, at 71 percent, according to JATO. More than 80 percent of Volvo's cars are diesel, and Land Rover barely sells any gasoline-powered vehicles in Europe.

But some experts believe that the diesel-heavy premium brands will have less immediate worry because they also have high levels of fleet sales in Europe. Fleet customers often drive corporate cars for just two to three years before returning them — meaning they will not immediately worry about whether governments might enact driving bans years down the road.

More immediate concern likely will come from manufacturers that sell diesels primarily to private buyers, who keep their vehicles for 10 years, on average. Those consumers will think hard before committing long term to a diesel that might be banned in the years ahead.

One brand that could face this pressure of uncertainty is Peugeot, which counted on diesels for nearly half of its sales during the first three months of this year. That was higher than any of Volkswagen Group's volume brands.

Victim of success?

Peugeot's vulnerability on diesels masks the company's achievement. It has the lowest measured CO2 emissions of any automaker competing in Europe and is one of the only brands to use the most expensive NOx reduction-technology, SCR urea treatment with AdBlue, across its entire diesel lineup. The public backlash against diesels in general could make Peugeot a victim if consumers have to confront a new reality of not being able to drive the cars into Europe's biggest cities.

Tobias Ulbrich, a specialist in transportation law with the German firm Rogert & Ulbrich in Dusseldorf, has little sympathy for carmakers, arguing they have brought the bans upon themselves with their scandalous behavior. He is representing some 1,700 Volkswagen owners in Germany suing the automaker for damages, claiming their VW diesels have lost resale value because of the emissions scandal and vehicle recall.

Ulbrich said the driving bans are the result of automakers' failure to meet NOx limits. And that has hurt the perception of diesel vehicles.

"In an environment where bans are an immediate threat," he said, "those people that regularly drive in the major metropolitan areas are not going to purchase a diesel under any circumstance — no matter how clean manufacturers claim these cars allegedly are."

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Interpol seeks 5 ex-VW managers over emissions fraud

Reuters  /  June 22, 2017

BERLIN -- The U.S. has issued international arrest warrants for five former Volkswagen managers accused of wrongdoing in connection with the carmaker's diesel emissions-cheating scandal, Sueddeutsche Zeitung reported on Thursday.

The five ex-managers and developers, including two executives under former CEO Martin Winterkorn, were indicted by U.S. authorities for conspiracy to commit fraud and violation of U.S. environmental rules, Sueddeutsche Zeitung reported.

A spokesman at VW's Wolfsburg headquarters declined comment.

A sixth person, former VW manager Oliver Schmidt, was arrested in February in Miami as he was about to fly to Germany. He is awaiting trial in a U.S. prison after being denied bail. 

German authorities were unlikely to extradite the five accused to the U.S., Sueddeutsche Zeitung reported.

Under the constitution, German citizens can only be extradited to other European Union countries or to an international court. But leaving Germany could pose the risk of being extradited to the United States from a third country.

VW, the world's largest automaker by sales, admitted to U.S. regulators in September 2015 that it had cheated on emissions tests there using software installed in as many as 11 million diesel vehicles sold worldwide.

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Former VW engine chief told to stay in Germany or risk being detained in U.S.

Automotive News – Reuters  /  June 24, 2017

MUNICH -- Former Volkswagen Group executive Heinz-Jakob Neusser has been advised not to leave Germany because he risks being detained by U.S. authorities.

"I have urgently advised my client not to leave Germany. Only here is it safe," his lawyer, Annette Voges, told Germany's Bild newspaper in comments published on Saturday.

On Thursday, Sueddeutsche Zeitung reported that the U.S. had issued international arrest warrants for five former VW managers who have been indicted for conspiracy to fraud and violation of U.S. environmental rules.

A sixth person, former VW manager Oliver Schmidt, was arrested in February in Miami as he was about to return from vacation to Germany.

Voges said the managers would likely have to continue to forgo foreign travel because they could not rely on a statue of limitations, which would exempt them from charges after a certain amount of time.

Under the constitution, German citizens can only be extradited to other European Union countries or to an international court. But leaving Germany could pose the risk of being extradited to the U.S. from a third country.

Neusser is a former VW head of engine development and a member of the VW brand's management board. He was the highest ranking of six executives indicted by the U.S. in January.

The others were Schmidt; Jens Hadler, former VW head of engine development; Richard Dorenkamp, who led a team of engineers that developed the first diesel engine designed to meet new U.S. emissions standards; former VW quality management boss Bernd Gottweis; and quality manager Juergen Peter.

Neusser appears to have perfected a "defeat" device used by Dorenkamp and Hadler to evade emissions tests, according to U.S. court documents.

A total of seven VW managers have been charged so far. U.S.-based engineer James Liang pleaded guilty in September and is cooperating with the authorities.

VW admitted to U.S. regulators in September 2015 that it had cheated on emissions tests there using software installed in as many as 11 million diesel vehicles sold worldwide.

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This has all the marks of an EPA sponsored witch hunt- Generally matters such as this are settled in civil court. Or does some bigger federal agency have a score to settle with the Germans?

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These are pretty serious crimes. Although I think our stringent emission level is BS. It's one thing if you cut the converter off your car or chip your diesel truck, but this is 15 million vehicles. Blatantly done. Ford and GM couldn't get a diesel to meet emissions without urea but VW could. Pretty unfair. 


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The Fix Is In: Car & Driver Tests the Software Update for Cheaty VW TDI Diesels

Car & Driver  /  June 2017

Throwing money at problems is how corporations make them go away. Pay for more lawyers, pay for more public relations, and certainly pay for more marketing in the hopes that the world will believe your new promises. For Volkswagen, those invoices have recently been supersized, befitting the scope of the diesel cheating scandal that has engulfed the company and prompted the recall of approximately 590,000 vehicles in the United States.

Yet, its attorney bills and the costs of hiring extra PR staff must seem like little more than a few padded expense reports to the accountants in Wolfsburg. Since a group of West Virginia University scientists announced in May 2014 that they had found unexpectedly high emissions from VW’s TDI vehicles—which led to the uncovering of the company’s conspiracy to cheat government regulators and defraud consumers—Volks­wagen has committed to spend at least $25 billion in the U.S. in legal settlements alone.

As the world’s largest car company bleeds, TDI money now begets its own economy [see “TDI Profiteering”]. VW even has had to create a subsidiary called Electrify America to ensure the spending of $2 billion on brand-neutral electric-vehicle infrastructure. Not coincidentally, Volkswagen says that it has quit the “clean diesel” business for good, at least in the U.S., to focus its green efforts on EVs. Except that as of April, the company owns more than 237,000 used diesels acquired through its court-mandated buyback program. And inventories are growing, with 15,000 more vehicles being turned in each week, according to reports. Without the joint blessing of the California Air Resources Board (CARB) and the United States Environmental Protection Agency, these cars are to remain parked in places like the lots that surround the shuttered Pontiac Silverdome, the former Detroit Lions football stadium 30 miles north of Detroit.

That’s where Volkswagen found our test vehicle, a 2015 Passat sold new in Texas and now showing 25,000 miles on its odometer. One of the so-called Gen 3 diesels that clean up waste gases with catalytic converters, particulate filters, and diesel exhaust fluid (DEF), it is among the first batch eligible for a fix—in this case, a software update to both its engine and transmission computers. This is per the emissions-modification proposal that CARB and the EPA approved on January 6, which also covers 2015 Beetles, Golfs, Jettas, and Audi A3s with 2.0-liter TDI engines, some 67,000 total vehicles.

A second phase of the third-gen recall will involve dealers fitting replacements for the entire emissions system, including a new diesel-particulate filter, diesel-oxidation catalyst, and selective ­catalytic-reduction converter. A second NOx sensor downstream of the catalyst also will be added, allowing the emissions system to operate in an improved, closed-loop mode thanks to another forthcoming software update. These new parts should ensure that the system functions correctly for at least 150,000 miles, and it will be monitored by the EPA and CARB through further testing over the next five years, an extension of the one year VW would normally be required to conduct an In-Use Verification Program of spot-checks of randomly selected customer vehicles.

Owners will benefit from a transferable emissions warranty that is extended to the greater of either 11 years or 162,000 miles from new, or five years or 60,000 miles from the date of the recall service. Volkswagen needs some manufacturing lead time, so the second phase of the recall won’t start until early 2018. But in late March, Volkswagen got the go-ahead for its dealers to resume selling 2015 TDIs equipped with the new software, including some brand-new leftovers. Shortly thereafter, we conducted our testing—with VW’s blessing—seeking to determine whether the fix carried any downsides or performance penalties that might be felt by owners of repaired cars.

Stopwatch Says

Since Volkswagen is legally prohibited from allowing any of these TDI buybacks back on the road until their software has been reflashed, our Passat was delivered with the new software. Subjective driving detected no anomalies in its operation—not that we anticipated finding any. VW is telling owners to expect few to no driving differences outside of improved accelerator response and slightly different shifting behavior on automatic vehicles. Neither fuel economy nor performance should be affected. However, owners are warned of the possibility of up to 14 percent higher consumption of DEF, depending on driving style.

That’s the most appreciable change brought about by the software, which will also have been stripped of the defeat device code that triggered different emissions calibrations for dyno emissions testing and on-road driving. “For the most part, it’s the dosing strategy for DEF” that allows cars with the new software to reduce emissions, says VW senior manager of regulatory affairs Rob Sutschek. No changes were made to other engine operating parameters, he says, specifically naming boost pressure, exhaust-gas recirculation scheduling, fuel-rail pressure, and injection timing. Which would indicate that at least for the third-generation diesels, the main benefit VW gained by cheating was merely stretching the DEF refill interval to coincide with a 10,000-mile oil change.

It’s worth noting that the fixed Gen 3 cars will not, in fact, be certified to the same emissions standards (federal Tier 2 Bin 5 and California LEVIII ULEV125) that they were originally supposed to meet. Rather, the court has created a new standard that resembles the current federal Tier 3 Bin 160, which is less stringent for lower-speed operation but allows fewer NOx emissions at highway speeds. Regardless of which emissions standard the fixed cars now adhere to, the broader environmental concern was the potential impact of junking so many vehicles. As Sutschek says, “The EPA wants these vehicles in service.”

At the proving grounds, we ran a modified version of our typical acceleration test, first with the new software and then again after the car had been reverted back to its “dirty” code by two Volks­wagen technicians. (Although they used a laptop plugged into the OBD II port, they stressed that VW dealers and others authorized to upload the new software would use a system that will not allow a car to be reverted to any earlier code.) In both zero-to-60 and quarter-mile tests, we recorded identical results: 9.3 seconds and 17.2 seconds at 82 miles per hour. Extra test equipment in the back seat and a passenger aboard mean these numbers cannot be compared with other C/D test numbers, nor should they be considered absolute. But the comparative fact stands: We found no notable performance differences between the car with its original dirty software and the same car after the fix.

The filler neck for the Passat’s DEF tank is located in the trunk, with the tank extending out of sight such that we were unable to accurately assess DEF consumption during testing. Nor were we able to do much fuel-economy analysis, although according to the Passat’s onboard trip computer there was no significant change during steady-speed cruising after we switched software.

We did employ a portable emissions-measurement system [see “Sniffing Around”] during testing. The data we collected with this device do not directly correspond to any measurements made during federal emissions testing, both because of the nature of the testing equipment and because our flat-out acceleration runs have no analogue in the federal procedure. We saw small amounts of NOx emissions present during steady-speed cruising at 90 mph reduced to zero with the clean software, which seems significant in that it indicates cleaner operation even beyond the speeds at which federal emissions testing is conducted. And of course, the tailpipe sniffer did in fact prove that the same car produced different patterns of NOx emissions depending on the software. Within the limited scope of our testing abilities, we considered this sufficient proof that Volkswagen was not perpetrating any further deception.

C/D Test Results
Acceleration 0–60 MPH 9.3 sec 9.3 sec
1/4 Mile @ MPH 17.2 sec @ 82 17.2 sec @ 82
30–50 MPH, Top Gear 5.0 sec 5.0 sec
50–70 MPH, Top Gear 6.7 sec 6.6 sec
30–90 MPH, 4th Gear 22.3 sec 22.8 sec
0–100 MPH, Standing Start 27.1 sec 27.7 sec

More to Come

Volkswagen has also submitted two other proposals covering the rest of the recalled four-cylinder diesels. While company officials would not comment on specifics, some details of the modifications to these cars can be found in the consent decree under which Volkswagen is currently operating.

Engine design for the generation-two TDIs, or 2012–2014 Passats, differs from the third generation’s but still uses DEF to curb emissions, so the fix for those vehicles will likely follow the same path as the 2015 models, relying on greater DEF dosing to lower NOx emissions. All the diesels should eventually get completely new emissions hardware. In fact, this is required by the consent decree for the first-generation TDIs, or 2009–2014 Jettas, 2010–2014 Golfs, 2013–2014 Beetles, and 2010–2013 Audi A3s. These earlier models do not use DEF, however, which makes the fix more challenging. These cars employ a NOx trap that requires periodic purging; this is accomplished by running a rich fuel mixture, which will likely result in reduced fuel economy.

Had Volkswagen been willing to make that trade-off years ago, it might have sold fewer cars, but the consequences of this crisis would surely have been averted. Since the emissions scandal was uncovered, VW’s annual sales in the U.S. have dropped by 21 percent—or nearly 85,000 fewer vehicles in 2016 than in 2013—at a time when the rest of the industry was up 12 percent. This year, however, its sales are showing signs of rebound, with first-quarter numbers up 10 percent. We can only imagine that this first fix, which puts thousands of Volks­wagen diesels back into service, will help bolster those numbers. Money can make problems disappear, but it is no substitute for fixing them.

TDI Profiteering

How some savvy wheeler-dealers cashed in on Dieselgate.

As get-rich schemes go, this one was fairly foolproof. All it took was a close reading of the Volkswagen settlement and some capital for a few astute individuals—and, rumor has it, a handful of non-VW dealerships—to cash in on the TDI buyback program, creating a homegrown VW diesel trade that fattened a few pockets. Several months ago, you too could have picked up a used diesel-powered VW for well below book value, then sat on it for a bit before turning it in to VW for the buyback money. Sometimes the payoff would be only a few thousand dollars, but one buyer who got the system wired, and who talked to us only on the condition of anonymity, claims to have made around $20,000 on some vehicles.

The $10 billion buyback and restitution program kicked off in November 2016, part of Volkswagen’s larger $15 billion TDI settlement that also includes fines and environmental remediation. The buyback is meant to put cash in the pockets of aggrieved VW customers. However, it also requires those owners to read and comprehend a fairly arcane system that calculates how much VW will pay for the car plus a second compensation payment, both varying based on model, year, and mileage. This has translated into opportunities for those paying attention, as the amounts work out to well above what these cars would fetch on the open market under normal circumstances.

Our anonymous source, whom we found through a Reddit thread, says he bought scandal-affected VWs and Audis from all over the country, mostly from dealers and auctions, collecting 27 vehicles. “I was the original owner of a 2011 2.0, and that’s what turned me on to it,” he says. “In June of last year, I started reading about the buyback and it looked like a good opportunity, so I borrowed whatever money I could get my hands on and started buying the cars.

“I have more than $400,000 invested, and the profits are variable, but my overall profit margin is going to be between 45 and 50 percent,” he says.

As shady as this might sound, it’s legal according to the Federal Trade Commission. Unless, of course, the buyer lies to the seller about the details of the buyback program to get a lower price. That’s fraud. Our source says he checked with his state’s department of motor vehicles to make sure he is aboveboard with state regulations. Because he’s treating diesel trading like any other investment, a CPA ensures his tax compliance.

Before you cash in your 401(k) to become a TDI flipper, understand that if you’re just learning about this now, you’re too late. Although it’s still possible to buy a TDI and submit a buyback claim before the September 1, 2018, cutoff, the cheap cars are gone, and the money-making days are well over. —Benjamin Preston

Sniffing Around

nox-readings-photo-684832-s-original.jpg To reduce the chances of another TDI fiasco, carmakers and government regulators alike have expanded their tailpipe-emissions measurement capabilities, moving out of the lab and onto the road. Gathering real-world insights regarding how cars behave in customer hands has necessitated a new category of tools called portable emissions-measurement systems (PEMS). Some of this gear is cumbersome and expensive, while other units—including the analyzer we borrowed from Infrared Industries for this test—are more wieldy.

The company’s FGA4000XDS PEMS is a nine-pound box containing non-dispersive infrared and electrochemical-cell sensors capable of quantifying concentrations of hydrocarbons, carbon monoxide, carbon dioxide, nitrous oxide, and oxygen in the exhaust stream. It can also display air-fuel ratio and engine rpm when connected to the engine’s ignition system. It is factory calibrated and certified to comply with international standards. After a five-minute warm-up and the insertion of a sample line into the tailpipe, this device is able to quantify the ingredients in practically any exhaust stream. —Don Sherman

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