Volkswagen Dieselgate: A Steering-Wheel Defeat Device and $33 Billion

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Volkswagen pushed "clean diesel" cars in the U.S., where strict limits target nitrogen oxides, and diesel engines produce about 20 times the NOx of comparable gasoline engines. Around 2005 VW planned to license Mercedes-Benz's BlueTec urea system, but its tank would not fit compact cars like the Jetta and Golf, and VW dropped the deal in 2007 for a cheaper lean NOx trap. Running that trap often enough to pass U.S. rules hurt fuel economy and performance. Engineers instead programmed the EA189 engine's control unit to detect a lab test, using cues like a steering wheel that never turns, and switch emissions controls on only then.

On the road the cars emitted up to 40 times the legal NOx limit. About 11 million vehicles carried the code, including about 500,000 U.S. cars from 2009 to 2015. In 2013 the International Council on Clean Transportation hired West Virginia University researchers to road-test VWs with portable Horiba equipment, expecting a success story, and found the excess. VW blamed calibration and issued a recall patch until the EPA threatened to withhold 2016 certification. VW admitted the device on September 3, 2015, and the EPA announced the violation on September 18.

VW stock fell 20% on the first trading day after the announcement and another 17% the next day.
CEO Martin Winterkorn resigned within days, and several executives were later indicted on fraud and conspiracy charges.
By 2020 the direct cost to Volkswagen exceeded $33 billion.
One study tied the excess emissions to 59 premature U.S. deaths; another estimated up to 16,000 in Europe.
Later testing implicated Jeep, Ram, Mercedes-Benz, Renault and Peugeot, and regulators adopted real driving emissions tests.

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