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It was an electrifying month for the German car industry. Mercedes-Benz has introduced its first fully electric SUV. BMW gave an overview of its upcoming EV strategy by unveiling a concept car. And Audi is also going to electricity. On Monday, the company celebrated the premiere of its first fully battery-powered car, the E-tron. Audi's exit night in San Francisco was particularly unlikely when you consider what happened three years ago.
As a member of the Volkswagen Group, Audi has played a central role in the development and installation of illegal software in 11 million diesel cars to deceive emissions tests. On September 18, 2015, the US Environmental Protection Agency informed the public of VW and Audi's violation of the Clean Air Act, prompting government agencies around the world to launch investigations. Dieselgate has become the biggest scandal to have shaken the automotive industry for decades. In three years, the Volkswagen Group has been forced to pay about $ 30 billion to settle the case. The sum is expected to increase by several billion dollars.
While they are focusing on their commitment to electric vehicles, German automakers are still struggling to contain the fallout from Dieselgate: leaders are being held in jail; investors sue for billions; the European Commission investigates VW, Daimler and BMW for collusion; and the once comfortable relationship with Angela Merkel's government has severely broken.
Guess, who did not attend Audi's exit Monday? It was Rupert Stadler, the CEO of Audi. Just hours before the party started, Volkswagen's board of directors met in Wolfsburg, Germany, to discuss Stadler's future with the company. He should be removed from his post next week. After all, he has been held in a Bavarian prison for three months and can not run a car company in that country very well. Not only is he suspected of making false statements to the authorities, but prosecutors believe that he has also tried to manipulate important witnesses.
Stadler is the sixth leader of the Volkswagen group to be jailed for alleged crimes related to Dieselgate. The list of suspects from VW, Audi and Porsche amounts to 70 names, which translates into a lot of work for Volkswagen lawyers. But they face another problem.
On September 10, investors filed a $ 10 billion lawsuit in Braunschweig, Germany, against the company, seeking compensation for the 37 percent decline in Volkswagen's share price following revelations by the company. EPA. They claim that VW has not fulfilled its duty to warn shareholders of the financial impact of the scandal. "I think the trial will be successful," said Ferdinand Dudenhöffer, professor of automotive economics at the University of Duisburg-Essen. The edge. "By including this case and all other pending cases, I suppose Volkswagen will have to pay an additional $ 15 billion in fines."
Volkswagen is not the only automaker in chaos. Daimler also has serious diesel problems. In Europe, the company recently had to recall 700,000 Mercedes-Benz diesel cars due to irregularities with their emission control software. While the German government has threatened the company with a $ 4 billion fine, it is still unclear whether Daimler will actually have to pay.
In comparison, BMW does not have much to fear. Although dozens of prosecutors and police raided the company headquarters in Munich in the spring (which happened to Daimler and VW much earlier), they found no evidence of major crimes. According to a recent report from the daily Süddeutsche Zeitung By quoting figures from the German Ministry of Transport, about 8,000 BMW diesel cars have been equipped with ineligible systems to stop emissions checks. The company claims that this is due to "human error". Finally, BMW may only have to pay a fine of $ 12 million.
In addition to these individual cases, there is a wider set of problems that concern the entire German automobile industry. Just in time for Dieselgate's third anniversary, the European Commission announced that it was intensifying its investigation into whether VW, Audi, Daimler, BMW and Porsche had agreed on diesel emissions in the early 1990s. are accused of having formed an illegal cartel that laid the foundation for Dieselgate. The Commission carried out inspections at the premises of BMW, Daimler, VW and Audi in October 2017. "If proven, this collusion may have prevented consumers from buying cleaner cars, although the technology is available for customers. manufacturers, "said Margrethe Vestager, European Commissioner for Competition.
Dieselgate has also upset German politics. For decades, car executives have maintained friendly relations with German lawmakers. Things were downright pleasant. Before Dieselgate, Germany's most powerful car lobbyist began his letters to the Chancellor with "Dear Angela". If other EU Member States, the European Commission or the European Parliament called for stricter regulations, carmakers new European rules. Experts conclude that politicians are partly responsible for Dieselgate. "German politicians have always thought they were helping the auto industry by tolerating regulations and keeping their eyes closed," said Dudenhöffer. The edge.
Now, politicians and manufacturers will pay the price of their close relationship. Most German voters now think that the government was too lenient towards Volkswagen, Daimler and BMW. Due to pressure from industry and German interventions, the European rules for the emission of nitrogen oxides (NOx) have so many loopholes that virtually all vehicles diesel emit more pollutants in the environment than in the test facilities. Although they are not illegal, these highly polluting vehicles have made air in many German cities much dirtier than is allowed by EU standards.
"For years, the German government has been reprimanded by the European Commission," said Dudenhöffer, "but he never did anything." To improve air quality, the courts have banned old diesel cars from several German cities. Hamburg, Frankfurt and Stuttgart were the first to announce these restrictions. "In the end, we will probably get diesel bans in 20 German cities," said Dudenhöffer.
Needless to say, this is not going well with many German voters, as millions of them own diesel cars. To prevent driving bans, the government is finally considering mandatory equipment updates at manufacturers' expense to reduce NOx emissions in older diesel cars. Environmentalists have been calling for this for months, but the government did not want to impose it on the auto industry. This only required less efficient software updates, but much less expensive.
The threat of driving ban already causes the collapse of the market share of diesel vehicles. In the first half of 2017, more than 41% of new cars in Germany were diesel. This year the number has dropped to 32%, according to a new study from the University of Duisburg-Essen.
The era of diesel cars, particularly important for German automakers, is coming to an end much faster than Volkswagen, Daimler and BMW would have liked. However, as Chinese and American consumers have quickly forgotten the case, German builders are still winning more than ever. The move to electric vehicles is therefore both an image rehabilitation and a financial necessity – as it turns out that the Germans have fallen in love with diesel cars.
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