California Orders VW to Draft 3.0 Diesel Emissions Fix Plan

Volkswagen AG must come up with a plan to recall models with 3-liter diesel engines after its Audi unit admitted to California regulators that those had a “defeat device” that the agency believes could have cheated on emissions tests like the automaker’s smaller diesels did. A defeat device alters emissions-control systems in a way that violated clean-air laws.

Volkswagen Australia has been hit with its first round of lawsuits over the emissions testing scandal, with two class actions launched against the vehicle giant.

The news widened a scandal at parent VW which has led to the ouster of its long-time chief executive and wiped more than 20 billion euros ($21 billion) off the group’s market value.

The U.S. Environmental Protection Agency is allowing Volkswagen (VLKAY) to submit a revised version of its software to correct emissions irregularities on 3.0-liter diesel engines used in Audi luxury vehicles.

Based on the Environment Ministry’s test results, the Transport Ministry will carry out three rounds of tests to look into whether the emissions rigging affected the fuel efficiency and safety of passengers, officials said.

Volkswagen says that the current flow pipe in that location baffles the air, making measurements inaccurate. According to the EPA, Volkswagen vehicles emit nitrogen oxides, or NOx, at nearly 40 times the standard amount.

As Volkswagen has placed a stop sale order on the affected models which need to be recalled and fixed, dealers have not been able to sell vehicles to the public, auctions or other dealers – keeping cash tied up in inventory when revenue is needed to keep businesses afloat.

USA owners of VW cars with diesel engines that can cheat emissions tests have already been given $500, but local owners still have no compensation.

The ministry said it will expand its investigation, adding that diesel cars offered by 16 automakers, including Korean brands Hyundai Motor, Kia Motors, GM Korea, Renault Samsung and Ssangyong, as well as other foreign cars such as BMW, Mercedes-Benz, Porsche and Jaguar Land Rover, will be inspected starting next month.

The ministry will investigate cars using the EA288 engines which reportedly meet the emissions standards, “Euro-5” and “Euro-6”.

If so, Voelcker estimates such a fix would cost Volkswagen several thousand dollars per vehicle, possibly even leading the automaker to buy some of its cars back.