Regulators reject latest VW emissions fix, see long road ahead

Volkswagen today watched the wheels come off its effort to move the Dieselgate scandal toward a quicker settlement. The automaker hit a very rough patch yesterday when the California Air Resources Board (CARB) rejected VW’s plan to fix thousands of diesels involved in the emissions cheating scandal, calling it “inadequate.” Today, a top official with the Environmental Protection Agency (EPA) said any plan would face a stiff test for approval.

Chris Grundler, director of the EPA Office of Transportation and Air Quality, told the Automotive News World Congress (ANWC) today that his team agreed with the negative reading that CARB gave to VW’s fix proposal. Further, he said, that he didn’t know how long it would take before VW would shape an acceptable plan.

“Both ARB and EPA continue to insist on an expeditious fix,” Grundler told the World Congress in Detroit today. The ANWC coincides with the North American International Auto Show (NAIAS), also in the Motor City this week. Automotive News, reporting on the Congress, said Grundler also indicated that regulators expect the fix will “not only bring these vehicles into compliance but also do so in a way that doesn’t create any adverse impacts for owners … We’re not there yet.” Grundler’s remarks came just before Volkswagen AG CEO Matthias Mueller and VW brand chief Herbert Diess left a key meeting in Washington without a deal on repairs. They were in the Capitol to meet today with Gina McCarthy, the EPA administrator.

In its action yesterday, CARB called VW’s submission “incomplete, substantially deficient and … far short of meeting the legal requirements to make these vehicles” compliant. The automaker originally filed its plan with California and the EPA in November. The automaker continually updated the plan.

The double-barreled rejections mean that VW’s battle with regulators will continue. So far, the automakers and regulators have spent the last four months sparring over a resolution to the diesel emissions violations. The rejections have also dimmed VW’s hopes of resuming diesel sales in the U.S. soon. Today’s meeting between VW officials and the EPA chief marked a departure in the ongoing talks between regulators and the automaker. The talks have been going on since the EPA announced the emissions violations in September.

Michael Horn, chief executive officer of Volkswagen Group of America, told reporters Sunday night that the talks were “political,” not technical. He said the talks were about “process so far and what do we need to do in order to finalize the process on a political level.”

Apparently VW leaders had expected that they would be able to convince regulators to accept and sign off on their fix proposal. It is entirely possible that they were surprised by CARB’s rejection, as well as by the EPA’s staunch support. Grundler, for example, didn’t pull any punches in his description of the VW plan. Like CARB, he said the VW plan fell short in some significant areas. He indicated that VW has a long road ahead before repairs can start on U.S cars.

“I do want to say that this is not a political matter,” the EPA official said. “It’s serious … the deficiencies cover a range of areas.” He said it was more than just “dotting I’s or crossing t’s. We agreed with CARB’s assessment.” Talks will go on.

The Dieselgate scandal goes back to 2006, during the development cycle of the then-new EA 189 motor. That motor was to become the basis for a new generation of diesel powerplants that ranged from 1.2- to 2.0-liters. The development team apparently knew that the engine could not meet the aggressive emissions levels set for 2008 when the powerplant was to be used. Since the automaker was committed to using that powerplant and, to keep its costs down, VW installed the “defeat switch” that tested for emissions tests. On discovering a test the “switch,” actually a software subroutine, branched to a point where the emissions system was reset to meet the standards. When it was in “test mode,” performance and mileage suffered. When the test ended, the engine was reset to “normal mode” where performance and mileage improved. Investigators found that some test cars had emissions levels that were as much as 40 times higher than allowable limits.

VW was able to get away with the switch because EPA investigators were focusing on other areas of the diesel market, not the TDI “clean diesel” market VW established. “We tested this 2009 TDI before it went to market. We tested it on our test cycles and it passed, and now we know why,” Grundler said. “Had we tested it using one of our on-road measurement devices or had we tested in different kinds of configurations, we would have found it.”