Dieselgate

Dieselgate refers to the Volkswagen Group’s use of defeat devices to cheat on diesel emissions tests. The affair came to light in 2015 after investigations by the U.S. Environmental Protection Agency and other regulators, and it affected about 11 million vehicles worldwide, including roughly 500,000 in the United States. The emissions software could detect when the car was undergoing laboratory testing and would activate reduced-noise control to meet tests, while emitting many times the legal NOx limits during normal driving. The affected vehicles included VW and Audi models with 2.0-liter and 3.0-liter diesel engines.

Once exposed, VW admitted to installing the software and to manipulating emissions certifications. CEO Martin Winterkorn resigned, and regulators in the United States, Europe, and elsewhere opened investigations. VW and its partners initiated recalls and buybacks and implemented software updates and hardware changes to bring vehicles into compliance, though some owners remained dissatisfied with the fixes and with residual performance changes.

Financial and legal consequences were substantial. In the United States, VW pleaded guilty in 2017 and agreed to pay more than $4.3 billion in penalties and settlements (roughly $2.8 billion in criminal penalties and $1.5 billion in civil penalties), plus billions more in consumer and environmental settlements in other jurisdictions. The company also faced shareholder lawsuits, criminal investigations of executives, and long-term reputational damage. Regulatory reforms followed, with tighter testing regimes, including real-driving emissions assessments, and stricter emissions standards for diesel engines.

The Dieselgate scandal prompted broader scrutiny of the automotive industry, leading to investigations of other manufacturers and a re-evaluation of diesel technologies and policies. It remains a reference point in discussions about corporate governance, compliance, and environmental accountability.