As Predicted By Coyote Over a Year Ago, Other Car Manufacturers Have An Emissions Cheating Problem

Back in November of 2015 I wrote:

I would be stunned if the Volkswagen emissions cheating is limited to Volkswagen.  Volkswagen is not unique -- Cat and I think Cummins were busted a while back for the same thing.  US automakers don't have a lot of exposure to diesels (except for pickup trucks) but my guess is that something similar was ubiquitous.

My thinking was that the Cat, Cummins, and VW cheating incidents all demonstrated that automakers had hit a wall on diesel emissions compliance -- the regulations had gone beyond what automakers could comply with and still provide consumers with an acceptable level of performance.

So we have this:

U.S. environmental regulators accused Fiat Chrysler Automobiles NV of using software that allowed illegal emissions in diesel-powered vehicles, the latest broadside in an unprecedented government crackdown on auto makers for alleged pollution transgressions.

The Environmental Protection Agency, days before the end of the Obama administration, delivered a violation notice to Fiat Chrysler accusing the auto maker of using illegal software that allowed 104,000 recent diesel-powered Jeep Grand Cherokee sport utilities and Ram pickup trucks to spew toxic emissions beyond legal limits. The affected vehicles have model years ranging between 2014 and 2016.

Regulatory compliance can be a royal pain in the *ss, but I comply with everything I know about and can figure out in my own business.  There just is no percentage in cheating.  Where regulation has made my business untenable, such as in certain parts of California, I have closed the affected parts of the business.

So if I see no good reason to cheat in my own business when the rents for doing so would flow directly into my own pocket, how in the hell do middle managers on a salary with little or no share in the marginal profitability gains of the company convince themselves to take these risks?


  1. kidmugsy:

    Why assume it starts with middle managers?

  2. Ike Evans:

    "The curious task of [politics] is to demonstrate to [politicians] how little they really know about what they imagine they can design."
    -Friedrich Hayek

  3. aczarnowski:

    how in the hell do middle managers on a salary with little or no share in the marginal
    profitability gains of the company convince themselves to take these

    Probably because we don't understand their incentives? If an auto release flops because performance sucks how do we know what the repercussions are? Maybe everybody gets fired.

  4. steamboatlion:

    If you're a German engineer at VW and you've devoted your career to designing car engines, possibly specializing in diesels, what's the hit to your status in admitting you can't design a diesel engine to meet the new regulatory requirements?

  5. Jim Collins:

    One of Coyote's previous topics was about "conflict of interest in government". So I have to ask a simple question. We have a Government that has basically declared war on coal and fossil fuels. Isn't it a conflict of interest for a Government agency (EPA) to create emissions regulations for vehicles that use fossil fuels, while at the same time providing taxpayer money to subsidize the electric car industry?

  6. DirtyJobsGuy:

    The European market has a curious fascination with diesels. In almost every country I know of, diesel fuel is taxed less heavily and is encouraged by the government. This includes France and Germany. It may be to encourage local refining or importing lower price crude better suited to diesel than gasoline output, who knows? It has been the case for 30 years or more. So if your local government has told you to build diesels and your customers have a price advantage to buy diesel what do you do when a different arm of the government pushes unobtainable goals? My guess is the government tells you to "work around it, wink wink nudge nudge". It is no accident that the VW issues were discovered in the USA not Germany. As Coyote said I'm sure this was the same for Fiat and anyone not using a urea based catalyst system like BMW or MB.

  7. J_W_W:

    If I were on the jury accusing any of these engineers, I'd find them not guilty. They adhered to the letter of the law, the emissions needed to pass emissions tests and they did.

    They violated the spirit of the law completely, but the spirit of the law was basically "sing kumbya and put forth unachievable restrictions because it feels good"....

  8. J_W_W:

    Pick one:

    1 better fuel economy


    2 less particulate pollution

    Europe chose the first option, the US chose option number 2, and then relentlessly complained about not having item 1.

  9. J_W_W:

    ...subsidize the electric car industry while fighting the implementation of nuclear power?

    Yep, its a huge conflict of interest.....

  10. J_W_W:

    I also have a real problem with the government going after VW for $15 billion for this.... while the people at the EPA who turned the Colorado river orange with mine waste water didn't pay any price whatsoever....

  11. Sam P:

    Technology to meet the tightening diesel emissions regulations existed (selective catalytic reduction aka urea injection aka diesel exhaust fluid) and was implemented in some manufacturer's cars (particularly Mercedes-Benz), but probably VW found it too expensive at the time. VW's engines can probably meet the standard with small modifications, but that'll result in either less power or higher fuel consumption (the NOx problem mostly shows up when the exhaust is too cool, one workaround is to run the engine "fuel-rich", either by injecting excess fuel (higher fuel consumption) or limiting the amount of oxygen (reduce power)).

    [not an engine expert, but read a lot about this previously]

  12. Sam P:

    Possibly related, a far higher percentage of freight are shipped by trucks in the EU, compared to the US. So using high taxes on diesel may distort the economy a lot more than consumption taxes are supposed to.

  13. McThag:

    I have another metric for the people panicking.

    Air quality is better despite the cheating. Almost as if the emissions restrictions did not matter.

  14. Rick C:

    "spew toxic emissions".

    Let's put that in perspective. If I am reading correctly, Table 1 says NOx emissions for passenger cars are limited to 0.6 grams per mile (after the car's driven 100K miles? I'm not sure what exactly the whole table means, but it doesn't alter my point very much). "Spewing toxic emissions" probably means, practically speaking, that any diesel cars are outputting something like 0.7 g/mi or so. As opposed to all those school and light transit buses you see belching out actual clouds of black smoke.

  15. Sam P:

    You were referring to the California (CARB) standards, the national (EPA) standards on that site are here.

    According to this document, Tier 1 is the standard set by Congress in 1990, at 0.6 g/mi NOx. In 1998, the EPA and automakers came to an agreement to lower that to 0.3 g/mi NOx, the National Low Emissions Vehicle (NLEV) standard. In 2000, the EPA tightened the screws on the automakers and set the Tier 2 standards at 0.07 g/mi (!). However, the EPA allowed this to be a fleet average, rather than strictly per vehicle. As this document only goes to 2000, I wonder when the EPA tightened it down to every vehicle (I assume it has done so, otherwise this scandal is... not a scandal)

    [edit: perhaps VW had certified their TDI powered cars in Bin 5, which means they would have to meet the 0.07 g/mi standard]

    The actual measurements in the report (page 62) that triggered this brouhaha were 10 to 35 times above the emissions standard, averaged over entire trips, so that means the peak emissions were (almost) certainly higher (it's theoretically possible that it was 35 times higher for the entire trip, but that seems highly unlikely). These are emissions averaged over trips because their equipment wasn't set up to produce continuously recorded instantaneous measurements.

  16. Matthew Slyfield:

    How do you know that they didn't design a engine that could meet the regulatory requirements but then had the accountants come back and say it costs too much?

  17. Bill:

    Exactly. Shareholders want more money. Government wants lower emissions. Guys at top scream to middle managers that they need to find a way to cut costs WHILE cutting emissions or it's their a$$. Quickly figure out it can't be done, at least not in the time frame provided them, so they try to find a way to cheat. Top guys have a clue what is going on but choose to look the other way if the numbers for the shareholders are good. If they get caught, top guys act shocked and outraged that their trust was BETRAYED, BETRAYED by such unethical shenanigans and roll over on the cheaters. Whether it's emissions, skimming employee hours or some other fraud, the penalties are never anywhere near the amount of money saved from the cheating. So it's effective.

  18. Northern Eye:

    This points out the folly of a Federal agency determining what is "required" even though there is no practicable method of achieving it. So now we have given the State power to destroy private business through "catching" violations of untenable laws......

  19. Matthew Teague:

    It's primarily a power/performance issue. The emissions spike when the vehicle is accelerating the way a normal driver would do, and the "cheating" devices and software simply limited vehicle engine power during the testing.

  20. Matthew Teague:

    It's basically the same answer. If you can't produce a product at a price the market can bear, you can't produce a product. Similarly, if you can't produce a product that has market demand, you can't produce a product.

  21. slocum:

    "how in the hell do middle managers on a salary with little or no share in the marginal profitability gains of the company convince themselves to take these risks?"

    I don't think they thought what they were doing was particularly risky. Gaming government tests is pretty much standard operating procedure in the auto industry. And it's not always clear where the line is. So, for example, if an auto manufacturer tunes a vehicle's engine and transmission to maximize efficiency during test procedures (which is common), but that tuning does not provide similar benefits during typical driving -- is that cheating? Is it cheating that could result in criminal charges? In the past, automakers have been caught overstating fuel economy, but they've only been fined. Nobody's been arrested. I think that's why VW and it's execs were expecting for the pollution test cheating -- the worst case would be that they got caught and the company was fined. Middle managers wouldn't have faced any consequences at all.

  22. Ike Evans:

    The issue you cite, strictly speaking, isn't necessarily a conflict of interest. Per Wikipedia:

    A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial interest, or otherwise, one of which could possibly corrupt the motivation of the individual or organization.

    If a congressman so happen to own stock in a car company that specialized in batter powered vehicles, and that congressman supports legislation that subsidizes this industry, that would be a COI.

  23. Q46:

    Simple explanation, Europe has no oil. (UK and Norway do of course; diesel was never popular in UK until the Climate Change scam and Government promoted it, and actually has always been taxed higher than petrol.)

    So for European Countries greater mileage means less motor fuel consumption therefore lower oil imports, hence the love affair with diesel.

  24. Q46:

    Since engines emit oxides of nitrogen and CO2, as I understand it with current state of technology and engine management it is possible either to have lower NOx emissions traded off with higher CO2 emissions, or lower CO2 emissions but higher NOx emissions: lower NOx or lower CO2, either not both.

    Motor manufacturers were therefore responding to what ever environmental 'danger' was fashion of the day. CO2 emissions were formerly filed under 'who cares' (quite rightly) but when CO2 became the Planet Slaying Monster they pandered to that regulatory whim.

    Where ever there is regulation, those who have to comply will find a way to game the system.

    Interestingly VW reports record sales and profits - probably thanks to frequent free mention of the VW brand on front pages and broadcast news round the World, so just look at the fine as the cost of advertising.

  25. Matthew Slyfield:

    Not quite the same answer. The way government regulators work, it may be literally impossible to create an engine that meets the regulatory requirement and is viable in the market.

  26. Peabody:

    Without looking at the exact wording, it is very unlikely that the law is that an emissions test needs to be passed. Rather, there is likely a stated standard to be always met and the test is used as a means to determine if that standard is met.

    Maybe jury nullification could be an option though.

  27. CC:

    The ideal way to meet these standards is with a very efficient engine, but this is a low-power engine (ie no ability to accelerate). There is also an interaction between NOx and particulates etc. You can't optimize power (which the customer needs), low particulates, high gas mileage, and low NOx etc all at the same time. Just ordering it from EPA does not make it achievable.

  28. DaveK:

    The problem lies with the fact that "compliance" with the regulation was defined as passing a very specific test that has strict protocols for how it is performed. Real-world performance doesn't matter very much if you can't pass the test.

  29. DaveK:

    And maybe those engineers don't get that year-end bonus they've been counting on.

  30. joe:

    The EPA test based on pollution per quantity of fuel burned. The pollution test should be pollution per mile. So if car A burns dirtier, but burns less fuel, the overall pollution per miles travelled may be less.

  31. Joe:

    Just need Congress to repeal those Stupid blasted laws
    like repeal the law of physics,
    or repeal the law of gravity.

  32. MB:

    > automakers had hit a wall on diesel emissions compliance -- the regulations had gone beyond what automakers could comply with and still provide consumers with an acceptable level of performance
    I'm not a diesel engineer or owner, but that doesn't seem to coincide with available reporting of the issue. VW has repeatedly said they would be able to fix the issues with some (relatively) minor hardware and software changes; Consumer Reports reported that testing in cheat mode resulted in slightly slower acceleration and a 4mpg fuel economy hit and that VW advertised better than EPA estimated mpg, while other manufacturers did not. This points to an incremental gaming of the testing for a competitive advantage (higher fuel economy, and perhaps some increased performance) rather than a technical inability to meet the standard.

    > if I see no good reason to cheat in my own business when the rents for doing so would flow directly into my own pocket, how in the hell do middle managers on a salary with little or no share in the marginal profitability gains of the company convince themselves to take these risks?
    Research shows that we have a negative event bias, so you're looking at the incentives backwards. The marginal *cost* to you of pulling out of California is a percentage of your profit; the marginal cost of a middle manager blowing the whistle or refusing is 100% of their salary and possibly a career blacklist.

    Specialization of labor also allows for multiple degrees of separation between an individual's decision and the ultimate impact. No individual middle manager (or even really a CEO at a company as large as VW) could directly cheat the emissions tests, and so no individual feels themselves directly responsible.

  33. VMS:

    With the advent of unleaded gas in or about 1972, and the catalytic converter in or about the same year, and subsequent adoption in all motor vehicles, air quality improved multi-fold to acceptable levels. Back in 1982, I proved that a properly tuned car without a catalytic converter could pass the emissions test then being instituted by New York State, but that a car out of tune would not if it did not have a catalytic converter.

    Cars since then have become much more fuel efficient, which automatically improves emissions per mile.

    EGR valves and lower compression have lowered NOx levels (but slightly hurt gas mileage). All in all, the pollution levels are VERY acceptable where one can walk in Manhattan in summer rush hour, and still breathe acceptably clean air.

    Lowering pollution limits to the edge of what is technologically feasible does nothing to materially further improve air quality, since the major reductions in pollution have already been accomplished. Rather, it wastes resources that could otherwise be used in a better manner.