HERNDON, Va. — Three years after Volkswagen Group admitted to cheating on diesel emissions testing, one of the most expensive scandals in automotive history still hangs over the German automaker's day-to-day operations.
CEO Herbert Diess says that, thanks in part to a global strategy shift to electric vehicles and efforts to clean up its own house after spending more than $30 billion to make things right, VW has put "most" of the diesel scandal in the past.
"We basically bought back and fixed close to 90 percent of the cars" globally, Diess said in an Oct. 31 interview here. "I think most of the things we have overcome. We still have legal issues worldwide, in Germany — you're aware of that — and it will take years to solve everything. We just settled with Audi [in late October], with the state attorneys in Germany. There's still legal issues, but technically, we overcame most of the issues."
In March 2017, VW pleaded guilty in U.S. District Court in Detroit to three felonies: conspiracy, obstruction of justice and introducing imported merchandise into the U.S. with false statements. The plea agreement settled claims by the EPA and U.S. Customs and Border Protection for VW's importation of almost 590,000 turbodiesel vehicles that violated clean-air regulations.
Diess said that, while law enforcement investigations continue into the company's actions related to development of its "clean diesel" engines — including the four-month incarceration in Germany of former Audi CEO Rupert Stadler before he was released in late October — the legal problems VW faced in the U.S. were the most perilous globally.
"Legally, we had here really a situation which was much more severe [compared] to the rest of the world, because our cars, when we launched the cars, would not comply with legislation," said Diess, who joined VW in 2015 from BMW.
"The fix in Europe was relatively easy; it was a software update for about 10 million cars, which is also through. We have fixed 90 percent of the cars, but it was not a real severe technical issue," he told Automotive News. "The situation here in America was, by far, the most critical one worldwide. And it has to do with the emission regulation here in the United States, which is much tougher than in the rest of the world. "
Diess said diesel has a future in VW's portfolio because it is a more "rational" powertrain choice in some cases, especially for long distances and larger vehicles.
VW will continue to invest in diesel "because in many countries, you don't have renewable energy available," Diess said. "And then, if you make the counts, diesel is probably still the best option for a low CO2-emission mobility. We are just working on the next generation of diesel engines, becoming even cleaner now, with additional catalytic converters in the car, with additional effort on cleaning, and they become really clean now. We will have a market for these in Europe and many other places. Probably not here, because diesel here always was a niche on the passenger car side."