Tuesday, October 19, 2021

VW, Porsche, Audi, Mercedez Benz Fined Billions For Fooling Environmental Regulators

Lux German automakers slammed by EU for years of misleading practices in the carbon emission direction.


  • E.U. imposes $1 billion in fines on Volkswagen, BMW, and Daimler for fooling environmental regulators.
  • The “emission cartel” misled authorities and kept emitting carbon prints above the legal limit by a massive margin.
  • After the dieselgate scandal, Volkswagen faces the biggest share of the total fine.
  • Daimler gets a clean-chit for compliance with the investigation.

In the wake of the alarming climate change situation, the European Union has fined the world’s leading automobile and luxury car manufacturers with a billion-dollar fine for colluding with the development of green technology to cut down emissions. Volkswagen (parent company of Audi and Porsche), BMW, and the parent company of Mercedes-Benz, Daimler, were slammed with a penalty worth $1 billion on Thursday for the so-called emission cartel.

According to the statement issued by the E.U., the three German automobile giants broke administrative antitrust regulations by colluding to curb competition “in the area of emission cleaning technology for diesel cars.”

In a statement, Margrethe Vestager,  Executive Vice President of the European Commission for A Europe Fit for the Digital Age, stated, “For more than five years, the automobile makers deliberately avoided competing on cleaning better than what was necessary by E.U. emission rules. And they did it even though that the necessary technology was available.”

The charges stand independent of the “dieselgate” scandal that Volkswagen faced massive criticism for. The German automobile behemoth was earlier found guilty of installing software in its 11 million diesel vehicles to dupe environmental regulators into emission compliance. The vehicles were, in reality, exceeding the authorized emission levels by a huge margin for years.

All the automobile players, VW, Daimler, and BMW, have admitted being part of the cartel.

ALSO READ: IMF Proposes Revision of Carbon Price Floor To Tackle Climate Change

Joint Notorious Alliance of automakers

The charges stem from manufacturing practices that occurred between 2009 and 2014. The carmakers conducted “frequent suspicious technical meetings” to discuss the development of technology that reduces dangerous nitrogen-oxide emissions from diesel passenger cars. 

The E.U. focused its action against the automobile companies’ agreement on the sizes of tanks used for AdBlue. This solution combines with diesel automobile exhaust to neutralize dangerous pollutants. Despite having the technology in place, the firms decided not to make cars cleaner. 

The cartel was initially revealed in Der Spiegel’s report (German news website) in 2017, and the corporations immediately began greenwashing. In the same year, all of the parties involved, including Ford Motor Company, came together to form Ionity, a high-power charging network for electric vehicles. The idea was to create and run roughly 400 charging stations across Europe by 2020, but it appears that Ionity only managed to install 300, and the price of a charge was increased by 500 percent last year.

Last year, BMW generated a net profit of $4.62 billion, whereas VW made between $12.2 billion and nearly $23 billion, so the amount here feels like a tiny pebble in terms of the harm they caused. Let’s not forget that this isn’t the first time VW is already involved in an emissions issue.

Fine lower than expected? 

The biggest share of the fine is levied on Volkswagen at €502 million ($595 million), followed by BMW at €373 million ($442 million). Since Daimler exposed the cartel and was the first to come clean, it was exempted from any fine.

The Commission did not accuse the automakers of consenting to adopt illicit technology. Instead, it said that they first agreed to use emissions technology that required to comply with minimum legal emission limit however, misleadingly did not do so.

Daimler stated that it had taken part in the investigation. The company said in a statement that the European Commission “explicitly found no evidence of any agreement on the use of illegal defeat devices.” On the other hand, Volkswagen consented to the settlement but stated that it was considering contesting some portions of it, as allowed by E.U. law.

The settlement announced won’t make any serious dent on either one, irrespective of the harm caused. 

Electric cars for the future? 

When considering the real impact of electric vehicles throughout their entire lifetime, combustion engine vehicles cannot compete. Electric cars emit significantly less pollution over their lifetime than vehicles powered by fossil fuels, regardless of the source of electricity.

Current electrical networks are primarily working to reduce their dependency on fossil fuels and increase their renewable energy output. Electric vehicles already emit lower emissions over their lifetime, regardless of the energy source, demonstrating that they are the vehicle of the future.

Gunjan Seth
Gunjan Seth is an MBA graduate and is experienced in writing for multi-dimensional genres. With a keen interest in content writing and communications, she likes to explore different arrays of website content and branding strategies. Besides giving proper attention to details and being ambitious, she is a big travel enthusiast.





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