The Volkswagen Group today lost its fight to have its Dieselgate emissions “defeat” device declared … [+]
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After five years of Volkswagen insisting its Dieselgate emissions cheat wasn’t illegal in Europe, the highest court in Europe has insisted it is.
And the European Union’s Court of Justice decision is binding, potentially adding billions more to the estimated €30 billion the diesel-emissions cheat has already cost Volkswagen.
It is an enormous blow to a company looking to move forward to electrification and put the Dieselgate “defeat” device – where 12 million diesel cars and SUVs emitted clean fumes in laboratory tests but unrestricted NOx emissions in the real world – behind it.
Volkswagen is facing lawsuits from customer groups, investor groups and environmental groups across Europe, and the Court ruling over case C-693/18 is likely to tip the scales in their favor.
The same court already ruled in July that Volkswagen owners affected by Dieselgate can sue in any of the EU’s 27 member countries.
The Luxembourg-based Court today ruled that the Volkswagen Group couldn’t justify the software-based “defeat” device on the grounds that it “contributes to preventing the ageing or clogging up of the engine.”
The Court ruled that while the software “must allow the engine to be protected against sudden and exceptional damage”, that didn’t include the wholesale use of the technology to cheat on emissions.
It could be utilized for “only those immediate risks of damage which give rise to a specific hazard when the vehicle is driven.”
It’s not just a blow to Volkswagen and Audi (the originating source of the emissions-cheating software), but to Mercedes-Benz, Opel and Peugeot as well.
In particular, Mercedes-Benz’s parent company, Daimler, has set aside billions of euros in expectation of just such a ruling based around legal criticism of its own alleged “defeat” device which switches its emissions-cleaning systems off when the ambient temperature is too cold or too hot.
A lawsuit in the United Kingdom against Volkswagen’s Dieselgate cheat is one the biggest the country has ever seen, with 91,000 customers now allowed to proceed in their case on the basis of the EU ruling.
Besides cash, reparations and vehicle buybacks, the scandal has already seen former CEO Martin Winterkorn charged with fraud, market manipulation, embezzlement and competition law violations, former Audi CEO Rupert Stadler in court on charges of fraud, false certification and criminal advertising.
