WASHINGTON -- Volkswagen AG admitted Friday to systematically cheating on U.S. air-pollution tests for years, leaving the automaker vulnerable to billions of dollars in fines and possible criminal prosecution.
The company sold diesel Volkswagen and Audi cars with software that turns on full pollution controls only when the car is undergoing official emissions testing.
During normal driving, the cars pollute 10 to 40 times the legal limits, the Environmental Protection Agency said, calling the technology a "defeat device."
The EPA on Friday ordered Volkswagen to fix the estimated 482,000 cars.
"Using a defeat device in cars to evade clean-air standards is illegal and a threat to public health," said Cynthia Giles, the EPA's assistant administrator for the Office of Enforcement and Compliance. "Working closely with the California Air Resources Board, EPA is committed to making sure that all automakers play by the same rules. EPA will continue to investigate these very serious violations."
She added, "We expected better from Volkswagen."
The German automaker said in a statement it is cooperating with the investigation, but declined to comment further. Agency officials said the car company had admitted to the use of the defeat device.
The cars, all built in the past seven years, are the VW Jetta, Beetle, Golf and Passat models, as well as the Audi A3. The vehicles contain a device programmed to detect when they are undergoing official emissions testing, the EPA said, adding that the cars only turn on full emissions-control systems during that testing. The controls are turned off during normal driving, the EPA said.
The EPA called on VW to fix the cars' emissions systems but said car owners do not need to take any immediate action. The violations do not present a safety hazard and the cars remain legal to drive and sell, the EPA said.
The EPA said VW faces fines of up to $37,500 per vehicle for the violations -- a total of more than $18 billion. No final total was announced. California issued a separate compliance order to VW, and officials announced an investigation by the California Air Resources Board.
Despite the seriousness of the violation, the EPA said VW will be given "a reasonable amount of time to develop a plan to complete the repairs," including the repair procedure and manufacture of any needed parts.
It could take up to a year to identify corrective actions, develop a recall plan and to issue recall notices, the EPA said.
Environmental groups complimented the EPA and California for enforcement of clean-air laws.
"The charges here are truly appalling: that Volkswagen knowingly installed software that produced much higher smog-forming emissions from diesel vehicles in the real world than in pre-sale tests," said Frank O'Donnell, president of Clean Air Watch, a Washington-based advocacy group.
O'Donnell accused VW of "cheating not just car buyers but the breathing public." He said the charges undercut industry rhetoric about "clean diesel" cars.
The Volkswagens likely perform better with the emissions controls defeated than they do with them on, said Aaron Bragman, Detroit bureau chief for the Cars.com automotive shopping and research site. Otherwise, he said, there would be no reason to have a setting that turns on the controls for tests and turns them off for regular driving.
"Obviously it's changing the way the engine operates somehow that may not be pleasing to consumers," he said. "It would follow that it would put it into a very different feel in terms of operation of the vehicle."
But Bragman said other countries may allow different modes for testing and normal driving.
"This is several steps beyond the violations that we've seen from other auto companies," said Tyson Slocum, director of the energy program at Public Citizen, a consumer advocacy group. "They appear to have designed a system with the intention to mislead consumers and the government. If that's proven true, it's remarkable and outrageous. It would merit a heck of a lot more than just a recall and a fine. We would see criminal prosecution."
It had been surprising that Volkswagen diesel models were able to get impressive horsepower output and fuel economy performance using less costly pollution-control technology than employed in some other automakers' engines, said Bill Visnic, an independent auto analyst in Weirton, W.Va.
The software workaround might have been what enabled the performance without the expected pollution controls, he said.
"You can't have anything like this that's intended to game the system," Visnic said.
It would be very difficult for Volkswagen to add new pollution-control equipment to the existing engines, so the only way to fix this may be to cut the horsepower and fuel economy performance of the models to lower the pollution output once the software is eliminated, said Visnic, who has been studying engine design for two decades.
Luke Tonachel, director of clean vehicles and fuels project at Natural Resources Defense Council, was puzzled as to why VW would have to cheat.
"Other vehicle manufacturers don't appear to be doing the same thing but still get good performance from diesel vehicles so it is hard to say why VW was doing this," Tonachel said.
But he was angered by VW's actions.
"Tightening government standards are making cars cleaner and it is disturbing to learn that VW is flouting those standards," Tonachel said.
Consumers should not read VW's action as an indictment of diesel cars, said Don Anair, research director for the Clean Vehicles Program at the Union of Concerned Scientists.
"There has been major progress in advancing emissions controls for diesels over the past 10 years," Anair said. "That's a fact. This is a problem with the manufacturer, not the technology."
In recent years, the federal government has aggressively pursued automakers for failing to disclose safety violations. On Thursday, General Motors agreed to pay the federal government a $900 million penalty for failing to disclose defects in ignition switches, a deal that disappointed many of the victims' families.
In 2013, Toyota recalled more than 10 million vehicles and agreed to pay the United States government a $1.2 billion settlement, admitting that it concealed information from consumers and regulators about problems with gas pedals that caused the cars to accelerate unexpectedly.
Information for this article was contributed by Matthew Daly and Tom Krisher of The Associated Press, Jeff Plungis and Jeff Green of Bloomberg News and Coral Davenport and Jack Ewing of The New York Times.
Business on 09/19/2015