VW Wins Approval for Fixes for a few of Its Dirty Diesel Engines

The recall process is now viable “technically, financially and in terms of manpower”.

German automotive regulator KBA has approved a software update for 2.0-liter diesel motors and has agreed in principle to a plan for 1.6-liter engines, Chief Executive Officer Matthias Mueller told about 1,000 company executives Monday in Wolfsburg, Germany.

At the beginning of November, the United States’ Environmental Protection Agency (EPA) issued a second notice of violation against the Volkswagen Group, claiming that certain cars powered by the company’s 3.0-litre turbo-diesel V6 engines were fitted with a defeat device, which allowed it to illegally pass American emissions testing for NOx (oxides of nitrogen).

Mr. Mueller also told managers that proposed fixes for more than 90% of all group vehicles in Europe have been approved by authorities.

The firm, which also owns Audi (LSE: 0FG8.L – news), Seat and Skoda, faces recalling 8.5m vehicles throughout Europe.

In the meantime, U.S. Senators Edward Markey (D-Mass.) and Richard Blumenthal (D-Conn.) issued a call late last week for Volkswagen to buy back the affected vehicles, citing such a program in the European Union for Volkswagen vehicles whose greenhouse-gas emissions were understated.

Our assumption that substantive changes to the motor would be necessary have not come true, Mueller said in the speech.

The 1.2-liter diesel probably only needs a software update, with the plan to be presented to the KBA by the end of the month, Mueller said. Volkswagen has lost 34 percent, or 18.4 billion euros ($19.6 billion) in market value, since the cheating scandal became public on September 18. While a violation under USA law, the software complies with laws in Europe, she said.

Before Friday, the EPA’s investigation involved only a few of those larger-engine models from VW, Audi and Porsche from 2014-2016, along with 482,000 vehicles with 2-liter diesel engines from the 2009-2015 model years.

The EPA on Friday said the probe now involves all Volkswagen and Audi models with a larger 3-liter diesel engine from model years 2009 through 2016.

Mr Mueller said VW’s internal enquiry into the scandal was “very complex” and would take many months to complete, though he promised a report on its progress in mid-December. The goal is to shake up the company’s autocratic structure and re-focus on three topics: digitalization, sustainability and integrity.