In a major embarrassment, German carmaker Porsche has been embroiled in the emissions scandal plaguing the other biggies of the German auto industry including Volkswagen and Audi. Volkswagen, the parent company of Porsche, was the first to fall prey to this scandal, commonly called ‘Dieselgate‘ or ’emissionsgate’ in Europe, was first discovered in September 2015, when the United States Environmental Protection Agency (EPA) issued a ‘Clean Air Act’ violation notice to Volkswagen AG after it was found that Volkswagen had ‘intentionally’ programmed turbocharged direct injection (TDI) diesel engines to activate certain emissions controls only during in-situ emissions testing and not under standard driving conditions. This led to emissions of up to 40 times more NOx in real-world driving. The NOx family of gases include NO2 and other pollutant gases. Volkswagen allegedly deployed this programming in about 11 million cars worldwide with 500,000 in the US alone between 2009-2015.
In a report by the German business magazine WirtschaftsWoche, the Federal Ministry of Transport in Germany (the KBA) and the Federal Motor Transport Authority are scanning records and filings to find whether Porsche installed devices in its cars, which had a backdoor means of enabling self-sensing or intelligent sensing when tests for fuel consumption and carbon-dioxide emissions were being performed. Such technology allows manufacturers, and this was the loophole Volkswagen utilised, to fabricate results by making cars appear more energy efficient. This follows a tip-off from an insider, sources say.
In defence, a Porsche spokesman said that the company’s cars complied with fuel consumption and emissions laws that were in place at the time the vehicles were registered, a possible confession that the carmaker may have made some mistakes, intended or otherwise. The Porsche scandal, if proved, will add further woes to Volkswagen AG after it was revealed that a VW Group reorganisation between Porsche and Audi was facing problems due to Group CEO Matthias Müller’s indecision. Furthermore, South Korea wants to ban Porsche and Volkswagen car imports after the scandal broke.
Volkswagen has had to set aside $19.7 billion for fines and related expenses after acknowledging the emission test scandal. Auto regulators around the world have stepped up their vigil as well. The last time the scandal reared its head in Audi, Stefan Knirsch, the head of R&D has to resign after serving only nine months. Porsche and Audi account for less than 20% of the passenger vehicles sold by VW globally but generated 67% of its operating profit in 2015. If they suffer, the effect on VW’s bottom line will be potentially tragic. This is the scale of the scandal, if and only if, Porsche too gets sucked in.