Emission Scandal: Volkswagen Sued by the US; Faces $20 Billion Penalty

But now the US has sued Volkswagen alleging that nearly 600,000 diesel vehicles, including all its brands, had illegal defeat devices installed resulting in excess harmful emissions and this may result in the German car manufacturer faces penalties well above $20 billion. The complaint has been filed against all the Volkswagen brands including Audi and Porsche.

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The lawsuit was filed yesterday and the Department of Justice alleged that Volkswagen had violated the Clean Air Act. This means that the company was selling, introducing into commerce, or importing into the US vehicles designed differently from what Volkswagen had stated in applications for certification to the Environment Protection Agency (EPA) and the California Air Resources Board (CARB).

According to the complaint filed, nearly 600,000 diesel engine vehicles had illegal defeat devices installed that impair their emission control systems and cause emissions to exceed EPA's standards. This leads to harmful pollutants being released into the air.

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"Car manufacturers that fail to properly certify their cars and that defeat emission control systems, breach the public trust, endanger public health and disadvantage competitors," said Assistant Attorney General John C Cruden for the Justice Department's Environment and Natural Resources Division.

Filing a complaint on behalf of EPA, the Department of Justice alleged that Volkswagen equipped certain 2.0 litre diesel vehicles with software that detects when the car is being tested for compliance with EPA emissions standards and turns on full emissions controls only during that testing process. During normal driving situations, the effectiveness of the emissions control devices is greatly reduced.

The cars therefore, meet emission norms when tested in a lab but when on road emit oxides of nitrogen (NOx) at levels up to 40 times the EPA compliance level. In total, the complaint covers approximately 499,000 2.0 litre diesel vehicles sold in the United States since the 2009 model year.

But Volkswagens problems do not end there as the EPA has further said that the company has equipped certain 3.0 litre vehicles with software that senses when the vehicle is undergoing federal emissions testing. The complaint covers approximately 85,000 3.0 litre diesel vehicles sold in the US since the 2009 model year.