Arnold Schwarzenegger is “mad as hell” at Volkswagen. Writing on his Facebook page, the former California governor was furious at the automaker for taking him for a ride. Seven years ago, when Schwarzenegger toured the 2008 Los Angeles Auto Show, he listened to VW of America CEO Stefan Jacoby sing the praises of the “clean diesel” Jetta TDI, which had just pocketed the prestigious “Green Car of the Year” award. With its stellar fuel economy and sports car-like acceleration, the new Jetta even passed California’s recently introduced tailpipe emissions standards, the toughest in the world. In combining these three traits in a diesel car at reasonable cost, Volkswagen’s brilliant engineers had squared a technological circle.
As all the world now knows, the engineers achieved no such thing. Volkswagen’s automotive miracle was a case of crude deception. The car’s newly-developed EA 189 diesel engine was only clean on the test stand. Out on the road, it turned into a stinker, emitting up to 35 times California’s legal limit of nitrous oxides, highly toxic pollutants that play a crucial role in creating smog. A piece of software installed by Volkswagen’s engineers detected the difference between test conditions and the open road. For the tests, the engine ran clean by sacrificing fuel economy and acceleration. For regular driving, the engineers programed the engine to run without pollution controls so drivers could enjoy the car as it was advertised, including the expected acceleration and speed.
What the German press calls “Dieselgate” is now the biggest case of fraud in automotive history. More than 11 million cars worldwide were delivered with the EA 189 engine and the deceptive software installed, requiring a massive global recall. Criminal investigations, lawsuits and regulatory probes have been launched by the U.S. Justice Department, the states of Texas and West Virginia, as well as countries around the world from Australia to Spain. At company headquarters in Wolfsburg, German police raided offices and apartments. Hundreds of class-action suits have been filed by consumers and investors. On the stock market, Volkswagen lost over one-third of its market value, or €27 billion ($29 billion), in just a few days after the scandal broke.