All you need to know about Volkswagen Scandal

Here are some takeaways from the ongoing Volkswagen scandal that broke the news.

The scandal undermines Volkswagen's whole push into clean diesel which has been the pillar of its efforts to develop environmentally-friendly technology.



Volkswagen in turmoil

-Discrepancies were found between VW's test results and real world performance in European diesel engines by the ICCT. U.S. Environment Protection Agency (EPA) investigated into Volkswagen and found that they illegally installed an engine control unit (ECU) software.

-VW has yet to explain who installed the software, under what direction, and why. The CEO of Volkswagen, Martin Winterkorn has promised full cooperation with the government following the company's admission that it rigged nearly 11 million cars to defeat U.S. smog tests.

-Many Germans worry that this will have a domino effect on their businesses, eroding the cherished 'Made in Germany' label.

Daniel Carder appears an unlikely type to take down one of the world's most powerful companies.
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CEO Martin Winterkorn apologized for the deception under his leadership and pledged a thorough investigation.

-After the company admitted that it rigged the emission tests, the share price fell 15.75 per cent.

How many cars have been affected? 11 million of the company's diesel cars worldwide were equipped with software that was used to cheat on emissions tests. The number of cars involved suggests that the scale of the damage to Volkswagen's reputation and its financial standing may be even greater than thought.

What consequences will the company face?It is not clear, though, how fully Volkswagen might be able to correct the problem on the 11 million vehicles. The company could presumably alter the engines, so that the cars on the road begin actually meeting the required emissions standards. But doing so would probably degrade the vehicles' fuel economy and performance, and might cause the engines to wear out sooner.

How much will it cost the company? The German automaker said it was setting aside the equivalent of half a year's profits - 6.5 billion euros ($7.3 billion) - to cover the cost of fixing the cars to comply with pollution standards and to cover other expenses, which are likely to include fines as well as responses to civil lawsuits from angry customers.

What engines were used on the affected vehicles? The affected vehicles use what is known as Type EA 189 engines, which are 2-liter engines. The company said that "a noticeable deviation between bench-test results and actual road use was established" for the engines.

Will the products be recalled? The EPA has ordered Volkswagen to recall almost a half-million vehicles sold in the United States from 2009 to 2015. The affected Golf, Passat, Jetta and Beetle cars were equipped with 2-liter diesel engines. Some Audi models also use the same diesel engine. Volkswagen has halted U.S. sales of cars with those engines.

Timeline

2001-2013: LEU-based clean air group ICCT monitors carbon dioxide (CO2) emission levels of 540,000 diesel cars. Gap between actual CO2 levels and manufacturers'claims rises to 38 %.

2013-2014: Joint ICCT and West Virginia University project in U.S. compares real-world tests on VW cars with lab tests by CARB. Results show nitrogen oxides (NOx) emissions and exceed lab tests by up to 35 times.May 2014: U.S. Environment Protection Agency (EPA) opens investigation into Volkswagen.December 2014: VW installs software patch to Engine Control Module (ECM) which operates engine and pollution control technology.May 6,

2015: CARB begins testing cars with software patch-NOx emissions remain higher than U.S. limits.July 2015: Regulators refuse to certify VW's 2016 models for sale in U.S. unless company explains anomalous emission levels.September 3, 2015: VW admits to CARB and EPA that it cheated on emission tests.September 23, 2015: The CEO Martin Winterkorn quit over the diesel scandal.

Sai Praveen

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