 It seems I can't go a day without getting an advert on YouTube asking whether I've leased or owned a diesel car recently. This question is usually followed by join our lawsuit against X-Manufacturer. Of course this hasn't affected me because I drive a God tier Honda Insight and those Japanese engineers at Honda can do no wrong. Well, these annoyingly smartly dressed lawyer type individuals in the videos got me interested in delving into why I get bombarded with these adverts. It is May 2014 and the International Council on Clean Transportation is conducting emissions tests on a number of German manufacturer vehicles. The non-profit is running some pretty average real world tests. Emissions rules are far stricter in the USA rather than the EU and the ICCT were looking to see the results of European manufacturer cars built for the US market and demonstrate the improved emissions to the Europeans. At the time there were pretty big discrepancies between cars sold in the two markets even though they were apparently identical models. They knew what the official tailpipe emissions were. Their test vehicles had just been certified at the California Air Resources Board Facility and they were shown to meet the state's strict rules. But real world tests would show how the vehicles reacted driving out on the open road. The team used three vehicles, a VW Passat, VW Jetta and a BMW X5. The Passat was of exceptional interest to the team as it was the most modern with a newer selective catalytic reduction system. As such the team of two professors and two students gave the Passat a long test drive from Los Angeles to Seattle and back roughly 2,000 miles in total. Upon returning to their lab the team found something very off. The emissions far exceeded legal limits set by both European and US standards, 20 times the NOx levels set on the dyno during the California Air Resources Board certification. A similar result came from the Jetta, surely there was an issue with the portable tailpipe emissions equipment the researchers must have thought. But strangely the BMW's results were within the expected Royal World range. The equipment had to be correct. What the researchers didn't know was that they had stumbled upon one of the biggest cases of fraud in automotive history. The results from this perfectly innocent test would rock a whole industry. Cost Volkswagen Group, billions of dollars, pollute the air we breathe and still be ongoing to this very day to remedy. Today we are looking at the Volkswagen emissions scandal. My name is John and welcome to Scandal, a plainly difficult series. Background. Our story starts strangely not with the W, but another German manufacturer, Mercedes. With a personal dream car of mine, the 300SD. Apart from looking like a West Berlin taxi, yes yes I know it was more the 1, 2, 3 but you know pale yellow diesel Mercedes equals taxi. And for me it's got to be that bleached yellow on a vintage Merc. But this is irrelevant to our story. Anyway, the W116300SD was the first sedan vehicle to make use of a turbo diesel engine. And like with most flagship Mercedes products, after a few years it made its way down to the cars and the masses. I'm still hoping for my Honda to grow night vision cameras, like I seem to remember Clarkson once saying in an episode of Top Gear, well the engine in the W116 was indirectly fuel injected. Seven years later, a direct injection turbo diesel had actually made its way into a car available for mere mortals. This was the 1986 Fiat Chroma TDI, lift back sedan. And Volkswagen would follow in 1989 with their own direct injection turbo diesel. I should say that diesels in Volkswagen vehicles weren't a new thing in 1989, they had been selling gulfs with naturally aspirated 1.5 units since 1976 and they had even been experimenting in the 1950s with a diesel powered boxer unit. Like many other manufacturers at the time using naturally aspirated diesel engines, the cars were painfully slow, horrendously loud and were very shaky. It was the implementation of turbo charging and direct injection that would push diesel engines to become more usable and less agricultural. But why diesel in the first place? Well the answer is pretty simple, cost. That is in fuel economy and reliability. These engines work by compressing diesel fuel to the point it spontaneously combusts. These engines have a very good thermal efficiency, which means less energy is lost during operation. Back to 1989 and the VW Group's first direct injection turbo diesel, which was named the TDI, it would be a 2.5 litre cylinder unit and became available in the Audi 100 and from there demand grew, for this new, smoother, more efficient engine, so did the development of the system. In the ever continuing battle to reduce turbo lag and increase efficiency, in 1999 the company would see its first common rail system. Common rail systems help increase pressure in the fuel system, which allows injectors to greatly improve the vaporisation of fuel, which makes combining of atmospheric oxygen easier, thus creating a better burn. These engines are more efficient and, if properly engineered, have longer durability than some petrol engines. On top of that, they also have lower CO2 emissions. So where's the catch? I mean even the most refined engines are still noisy and slower compared to similar turbocharged and displacement petrol engines, but the main thing is higher NOX emissions. Ok we need to pause here before we get into the scandal to quickly discuss NOX. Nitrogen Oxides NOx gases in our story are byproducts from combustion, when hydrocarbons are burned at high temperatures, the nitrogen and oxygen reacts to form nitrogen oxides, which are molecules containing one nitrogen and one or more oxygen atoms. Nitrogen oxides are responsible for the creation of smog and acid rain, the form of which can cause in humans, asthma, diabetes, DNA mutations, cancers and other respiratory conditions. The latter is well acid rain, needless to say that stuff is pretty nasty. The high temperature caused by the high pressures needed to create combustion is perfect for the production of fine particles in the form of NOx. It is thought that diesel engines produce between 5 to 10 times more NOx in comparison to a petrol car. Obviously most manufacturers don't care about this unless there are rules and financial penalties to encourage reductions of certain particulates, and this was the case for the USA. The country's emissions and pollution laws go way back to the Air Pollution Control Act of 1955. The laws would continue to develop over the next few decades. One such was the US National Ambient Air Quality Standards, which was an amendment in 1990 to an earlier Clean Air Act. This amendment was aimed at reducing several particulates in the hope of addressing acid rain, ozone depletion as well as general air pollution. As the decade rolled on, emissions regulations became stricter. One such change was in 1999 and Tier 1's replacement with Tier 2 rules, which reduced the NOx limit from 1.0 grams a mile to 0.07 grams per mile. Tier 2 standards would be phased in between 2004 and 2009 to allow manufacturers to adapt, and this brings Volkswagen back into the picture. During this phase-in period, Volkswagen ceased selling its diesel-powered passenger cars in the USA in 2007. The company announced that this hold was whilst they got hold of new compliant technology, but they will be back soon in the market. A year after the start of the phase-in, Volkswagen had looked into striking a deal with Mercedes in 2005 to license their BlueTek system. BlueTek uses a selective catalytic reduction system. This uses diesel-exhaust fluid known as AdBlue, and a system of NOx absorbers. AdBlue is a mixture of urea and deionized water. It is injected into the exhaust supplied from a separate tank. Because it is so hot in the tailpipe, the AdBlue decomposes to ammonia. This then reacts with the NOx, reducing it to oxygen and hydrogen. These are then exhausted to the atmosphere. The system, although rather clever, does have a number of drawbacks. That is, weight from the extra fluid and extra cost of having to buy the AdBlue, as well as generally the system being more complex. However, complications with branding of the system on Volkswagen vehicles resulted in Daimler AG and Volkswagen terminating their agreement. Now faced with no system, BW sought out to build an in-house NOx reduction system. The company looked to lean NOx trap technology, which was of all things most importantly cheaper than the BlueTek system. This system is much more similar to a conventional catalytic converter, but its media inside the converter captures the particulates. Once it is full, the system is purged by injecting fuel into the filter, which then burns off the NOx as hydrogen and water. The system was promoted as a wondrous new technical marvel of low emissions, high economy, as well as great low end torque and sprightly performance. What's not to like? With 39 US MPG on the highway, in comparison to the 2010 Honda Insights 40 miles per gallon, it hardly seems worth messing around with the newfangled hybrid systems over just one mile per gallon. Volkswagen went hard on the clean diesel thing, making the company the major player in the US diesel engine market, even earning green car subsidies and tax exemptions for its earth-friendly cars. When tested, the cars fell below the tier 2 maximum threshold for NOx particles. They had apparently made the perfect balance, but VW's magical lean NOx trap technology was more smoke and mirrors than amazement of modern technology. The company had actually failed to meet the emissions regulations for their diesel engine technology, but rather than admit defeat, management thought of a deceptive way to pass testing. The defeat device. You see, engines could meet regulations, but only when heavily detuned, resulting in the vehicle being more reminiscent of the 1970s level of power and economy. VW had a solution to this problem. How about having two operating modes in the engine, control unit software? One for doing emissions testing and another for the real world. The former would reduce power and efficiency purely for the purpose of passing national tailpipe regulations and latter for normal day-to-day driving. But how did the car know? Well, modern cars have loads of sensors such as throttle, steering, body control, traction control, etc. The ECU would be able to figure out due to the lack of input from things like the BCM and steering sensors, but it was being emissions tested. At this point, the ECU would change to its testing mode and thus nerf engine performance. It goes without saying that Volkswagen Audi group didn't tell anyone about this software and thus the deceit was set. Emissions. Too good to be true. The USA in the late 2000s had some of the strictest emissions testing in the world and Volkswagen Audi cars were meeting these standards. Even though cars with the same engines in Europe were showing to meet Euro 5 rules, but exceeded the US Tier 2 rules. And this brings us back to the ICCT and their testing of that Jetta Passat and X5 in 2014. The test was commissioned by John German, co-lead of the US branch of ICCT after a request from Peter Monk, the head of the ICCT's European branch. The four-person team, the ones who had been conducting the tests, repeatedly checked over their results. After every test, it was seen that the Volkswagen's were repeatedly emitting far higher than the official figures. Their results were passed back to German, who then passed them on to the EPA and CARB in May 2014. The EPA began its own investigation and found their real-world tests also to be far higher than lab testing. VW were asked why their initial responses was to put blame on isolated technical glitches. Over the coming months, the CARB and EPA continued to question VW management, with each meeting the defeat device was not revealed to government bodies. Even when threatened with the EPA not certifying the 2016 model year, VW continued to try and evade their ever-increasing accusations, but the company was now just digging its own grave. The EPA were also doing their own investigations behind VW's back. ECU defeat devices were not unknown to the industry, and because of this, the EPA focused its investigation on the onboard engine control system. Using owner's forums and Volkswagen's own service manuals, computer scientists were able to obtain and test the ECU's code. After nearly a year of searching, a line of code named acoustic condition was found. This code was responsible for taking the information from the speed, steering and traction control sensors and determining if the car was being tested. The code originally did work to manage the noise of the engine upon startup, but it served as the perfect camouflage to hide the defeat software. In August 2015, VW employees met with the EPA. They were given a script approved by management, which would continue to conceal the defeat device, but these employees ended up blowing the whistle. They told the EPA that there were two modes of operation programmed into at least the two-litre diesel engine, aimed at circumventing emissions tests. The smoking gun had been found, time to confront the company. The EPA took their findings and issued a notice of violation to VW on the 18th of September 2015. The company had admitted to the deception a few days before the official notice, but the notice gave Volkswagen Audi Group a head start to destroy as much documentation as possible regarding the defeat device. This destruction of evidence is pretty reprehensible. It would also come out that Bosch had written the original software with the original intention for it to be used only for in-house testing. Bosch had even stated to not use it in production vehicles, but obviously that was ignored by Volkswagen. On the 23rd of December, VW CEO Martin Wintercorn released this statement when he reluctantly stepped down from his position. I am shocked by the events of the past few days. I am stunned that misconduct on such a scale was possible in the Volkswagen Group. As CEO, I accept responsibility for the irregularities, and I am doing this in the interest of the company, even though I am not aware of any wrongdoing on my part. Well, the US government would beg to differ, but we will talk about that in a bit. The company around the same time stated that some 11 million cars were potentially affected worldwide. Volkswagen Audi Group announced on the 29th of September 2015 that it was planning to recall and refit the 11 million vehicles from brands Audi, VW, Skoda, Seat and Porsche. These vehicles were scattered throughout the US, UK, EU as well as many other countries across the globe. Some engines would require hardware fixes, where some others only just a software tweak. In the USA, VW dealerships were only allowed to sell some brand new 2015 or 2016 models, but no secondhand diesel engine cars. Needless to say, this was another financial hit, but the biggest was yet to come. The aftermath. A day after the announcement on the 21st of September, VW stock dropped by 20%. Another day later, after a $7.3 billion spend confirmed by the company, the stock dropped another 17%. 2016 wouldn't be any better. In March, Volkswagen US CEO Michael Horn resigned, followed by the company agreeing to buy back some 500,000 cars in the US in April, as well as offer compensation. Sales of VW cars dropped on average 24% in the US during 2015 after the scandal. On 11th of January 2016, Volkswagen agreed to omit guilt on an indictment relating to the emission scandal. As a punishment, they were ordered to pay $4.3 billion in penalties. Six executives were also charged with fraud at the same time. Well, you know I said the US government would have something to say about the now ex-CEO Martin Wintercorns involvement. He'd be indicted in May 2018 on multiple cases of wire fraud and conspiracy to violate the Clean Air Act. However, he hasn't yet faced those charges due to not going to the USA after his indictment. But in his native Germany, there would also be a criminal case against him. Martin Wintercorn was charged along with four other top VW bosses, but as of writing this script, the trial has been postponed due to the ex-CEO's poor health and the global pandemic. It does make you wonder if the 74-year-old will ever see his day in court. Even now, however, Wintercorn denies any knowledge. The execs still residing in Germany will unlikely see a US court, unless they willingly go, as Germany will only extradite its citizens to other EU countries or international courts. But there are a couple behind bars due to the scandal. Engineer James Lang and Compliance Officer Oliver Schmidt were sentenced to prison time in the US. The scandal cost the company roughly $29 billion, however, public opinion hardly seems damaged. As in 2018, they sold over 10 million cars, a company record. Since the scandal, VW has pivoted away from diesel towards hybrid and electric technology. Many Volkswagen and Audi Group cars, if not electric, have small turbocharged petrol engines, like the Skoda Octavia with its 1.4 turbo petrol, a car that used to be a very well-known sight as diesel-powered taxis outside London. I can actually admit that many a time I've crawled out of one of them on a Friday night. It is estimated that between 60 and 100 excess deaths are linked to the VW scandal alone, but they turned out to be not the only manufacturer dodging emissions regulations. Several other manufacturers have been found to be fudging the MPG figures, CO2, and NOx emissions of their vehicles. This hints at an industry-wide issue, which may one day become another episode of scandal. This is a plainly difficult production. All videos on the channel are creative commons attrition-share-arch licensed. Many difficult videos are produced by me in the currently average corner of southern suburban London, UK. I'd like to thank my Patrons and YouTube members for your financial support. If you enjoy the music in the background of this video, then please head over to my second channel, made by John, or even check me out on Spotify, or if you're feeling extra generous maybe even purchasing it on iTunes. I do have Twitter if you want to go on there to check out any hints on future videos, and all that's left to say is Mr Music, play us out please.