Volkswagen is accused of—and has admitted to—circumventing the emissions control system in about 550,000 vehicles sold in the United States since 2008 with the 2.0-liter diesel engine. As many as 11 million vehicles worldwide may be affected.

In mid-September, 2015, the EPA issued a notice of violation to Volkswagen AG, Audi AG, and Volkswagen Group of America (collectively VW) for failure to comply with Clean Air Act regulations. In November, the EPA notified the automaker about violations found with its 3.0-liter V6 diesel engine, as well. In doing so, the agency determined that certain Audi, Porsche, and Volkswagen models have been emitting more pollutants than legally acceptable, leaving in their wake potential environmental and health implications.

Consumer Reports provided a historical diesel fuel-economy analysis to the EPA to help its ongoing investigation. By the end of November, Volkswagen told the EPA that the issues with the 3.0-liter V6 diesel engine impacts model years 2009 through 2016 and counts about 85,000 vehicles.

Since the initial announcement, investigators have worked to learn how the illegal strategy came about, while the EPA has sought to close loopholes and ferret out any other potential cheaters.

On the corporate side, executives have been terminated and shuffled, stock values have plummeted, and hands were wrung—but few details have emerged about the tactical decision to willingly cheat the government, customers, and the environment.

Meanwhile, consumers have been left with many unanswered questions. This fast-moving situation promises new drama and eventual recalls. For now, here’s what we know so far.

Impacted Models

What Is the Concern About Volkswagen Emissions?

Federal clean-air standards are configured to become increasingly stringent over time, with clear steps when new, tighter requirements must be achieved for legal new-car sales.

The rules are in place to improve air quality for both long-term environmental and health benefits. Although the cited Volkswagen models can meet the standards in a laboratory test, thanks to a sophisticated software algorithm that distinguishes testing from real-world driving, these vehicles were found to emit nitrogen oxides (NOx) at up to 40 times the standard when driven normally.

NOx contributes to ground-level ozone and fine particulate matter. According to the EPA, “Exposure to these pollutants has been linked with a range of serious health effects, including increased asthma attacks and other respiratory illnesses that can be serious enough to send people to the hospital. Exposure to ozone and particulate matter have also been associated with premature death due to respiratory-related or cardiovascular-related effects. Children, the elderly, and people with pre-existing respiratory disease are particularly at risk for health effects of these pollutants.”

Did Skirting of the Emissions Rules Result in Better Fuel Economy and Performance?

It appears so. In response to the scandal, Consumer Reports conducted new testing of 2015 and 2011 Volkswagen TDI diesel vehicles in this “cheat” mode to assess fuel economy and performance. We found a noticeable decline in fuel economy for both models. Our testing also showed reduced acceleration with the 2011 model, which is equipped with a lower-tech diesel filtration system.

How Will This Affect Current Owners?

For now, the cars are safe and legal to drive. No action is needed by today’s drivers.

There will be a recall to bring the existing models up to regulations. The fixes will likely be software updates for the newest models. Pre-2015 cars are expected to need additional components installed—which may mean it takes longer to develop and deploy the solution.

2009 Volkswagen Jetta TDI
2009 Volkswagen Jetta TDI

Can I Still Buy a New Volkswagen Diesel?

Yes, from private owners and third-party retailers, but not from an Audi, Volkswagen, or Porsche dealership as a new or certified pre-owned model.

Volkswagen has withdrawn the application for the certification of vehicles equipped with the 2.0-liter diesel engine for the 2016 model year. For now, this effectively cancels these model variants from the new model year. Existing 2015 models at dealerships are subject to a stop-sale, meaning, they are not available for purchase. However, due to this investigation, their availability may change.  

A stop-sale order has also been issued to dealerships covering vehicles from Audi, Porsche, and Volkswagen fitted with the Gen II 3.0-liter V6 TDI diesel engine. Dealers are directed not to sell the following V6 diesel vehicles as new or certified pre-owned:

2013 Audi Q7
2014 Audi A6, A7, A8, Q5, Q7
2015-2016 Audi A6, A7, A8, Q5, Q7
2014-2016 Porsche Cayenne
2009-2016 Volkswagen Touareg

With Volkswagen later telling the EPA that the issues with the 3.0-liter V6 diesel engine impacts model years 2009 through 2016, more guidance is anticipated.

Can I Make VW Buy Back My Car?

Not yet. The proposed settlement allows owners to either sell back or cancel a lease on any 2009-2014 2.0-liter, four-cylinder TDIs. Owners wishing to keep their vehicles will be offered a Volkswagen-designed but yet-to-be-EPA-approved modification that would bring their cars into compliance with the Clean Air Act. This plan does not yet include the 80,000 3.0-liter V6 diesels. For now, there is nothing that TDI owners can do except wait—likely until late June—while the lawyers for VW and the government hash out the details.

When Will There be a Recall?

This process is leading up to a recall to bring the affected cars into conformity with emissions regulations. When issued, the recall will come from Volkswagen, and the repairs will be performed at no cost to owners.
The EPA will validate the fixes to ensure they work, with an eye to potential compromises. Consumer Reports has three VW diesels in our test fleet, and once the recalls are performed, we will re-evaluate their fuel efficiency and performance.

It is expected that a software fix can readily bring 2015 models into line. However, VW might need some time to determine a proper solution for older models, which have different diesel-emissions systems.

A company spokesman told us, “We are working with the relevant authorities to identify a remedy.” In other words, stay tuned.

On January 4, 2016, the EPA released a statement that reads, "So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action.”

2011 Volkswagen Jetta TDI label
2011 Volkswagen Jetta TDI label

What Is 'Cheat Mode'?

One key factor in the emissions scandal is that the vehicles in question operate in two different modes: “on road” and “dyno.” But merely having two different modes isn’t a problem; many cars offer driver-selectable modes to enhance fuel efficiency or performance.

The Volkswagen and Audi diesel vehicles in question in the U.S. use an Engine Control Unit, or ECU, designed by Robert Bosch GmbH, a German multinational engineering and electronics company. In addition to the ECU, Bosch supplies other key components, such as the computers that control the braking and electronic stability control systems. This is where the dyno mode—also referred to as a test mode—comes into play.

Emissions system and fuel economy testing is conducted while a vehicle is placed on a dynamometer—think of it as a two big rollers or a treadmill—rather than driving on the road. The vehicle has only its driving wheels rolling (the front ones, in the case of VW vehicles). But the rear tires are stationary.

The vehicle could otherwise interpret the test procedure as a dangerous situation or malfunction, activating traction control or stability control. By enabling a test mode, the vehicle will be able to operate during the test process. Once the test is complete and the car is restarted, the car reverts to its normal function. 

The Bosch system (EDC 17) used by these models has the capability to run different algorithms to manage engine performance onboard and could alternate between those seamlessly. Other companies using similar hardware have employed this ability to enable the driver to adjust the car's dynamic personality. But VW used this mode for other purposes.

What Is Consumer Reports’ Position on 'Dieselgate'?

Volkswagen lied to us. Its 11 million "clean diesel" cars have been polluting the air at up to 40 times the federal standard for years.

Worse: It installed technology to hide the problem from emissions tests.

The company is being punished by the markets. But that doesn't compensate either its customers or the rest of us, and it doesn't stop this from happening again.

Consumer Reports' President and CEO Marta L. Tellado, Ph.D., put it this way, "We need to make certain that the consequences for deceiving the public are severe, and that they bring justice to those who have been harmed." (Also read "Will Volkswagen's Penalty Be High Enough?" by Tellado on CNN.com.)

Consumer Reports has put together a four point test by which to judge Volkswagen’s response.  

VW accountability test

How Do VW’s Actions Affect Consumer Reports’ Recommendations of VW and Audi?

Based on the EPA notice of violation against Volkswagen for circumventing emissions testing guidelines, Consumer Reports has suspended its “recommended” Rating of two tested VW vehicles: the Jetta diesel and Passat diesel. These recommendations will be suspended until Consumer Reports can re-test these vehicles with a recall repair performed. Once the emissions systems are functioning properly, we will assess whether the repair has adversely affected performance or fuel economy.

How Will VW Compensate Owners?

Volkswagen of America has hired Kenneth Feinberg, a prominent victim compensation attorney, to create and administer a claims program that will address the needs of car owners impacted by the company’s diesel emissions violations. The agreement has Feinberg and his law offices developing a program, based on input from VW and affected car owners, although details of how it will work and who will be eligible are not yet determined.

In addition, VW has a "goodwill" program that offers affected diesel-car owners owners with a combination of a $500 pre-paid Visa card, $500 in dealership credit, and three additional years of roadside assistance. Initially offered to just 2.0L TDI owners, the goodwill has been extended to 2009-2016 Touareg TDI owners, as well.

What About a Settlement for Owners?

At the U.S. District Court in San Francisco, on April 21, 2016, Judge Charles R. Breyer revealed some promising broad strokes of VW’s settlement with the federal government and owners, including a tentative agreement to fix or buy back about 500,000 2.0-liter, four-cylinder TDI vehicles and allow diesel leaseholders to walk away from their leases without penalty.

Judge Breyer also disclosed that VW's agreement will establish a fund to address the environmental consequences from its vehicles' excess nitrogen oxides (NOx) emissions.

But critical aspects of that agreement in principle were missing, including how much VW will pay to buy back those vehicles and how, specifically, the company proposes to “fix” its cheating diesels. Also left out of the announcement was exactly how much money Volkswagen will have to pay in fines. Breyer gave VW’s lawyers until June 21 to work those details out.  

What Will the EPA Do Now?

The EPA announced it will conduct sample tests on all diesel passenger car models to be sold for the new model year. Plus, the agency will add new tests to detect so-called "defeat devices" that can bend the rules in an automaker’s favor; Volkswagen admitted to using software to serve this purpose, putting the cars in a special mode just for government emissions testing, then switching to an alternative programming for driving in the real world. The EPA will not release details on how it will seek possible cheaters, but it has notified all manufacturers of the general changes to its test program.

The agency is actively collecting diesel cars from consumers and rental fleets to augment models culled from manufacturers. These cars will be put through a battery of tests.

The EPA says the investigation into Volkswagen’s actions is ongoing. When asked to speculate as to the penalties the German automaker might face, an EPA official says that the potential fine could be as much as $37,500 per vehicle, or $18 billion.

The EPA and the Department of Justice filed a civil complaint against Volkswagen (including Audi and Porsche) on January 4, 2016, that "alleges that 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, resulting in harmful air pollution."

Will My Volkswagen Fail Emissions Tests?

Not likely. Since no state uses a "roller test" on periodic emission/safety inspections, there's no reason for a car to fail unless it developed an anecdotal problem. If a car is covered by an emissions warranty (differs by the state the car was originally sold in), VW will fix related problem for free. For some states, after an actual recall has been issued, owners will have a time period, potentially a few months, to complete the recall. The car will not pass inspection unless recall work has been performed.

Should I No Longer Consider a Diesel Car?

Diesel cars and trucks typically deliver excellent fuel economy, and they provide power that can create an urgency to acceleration and/or aid towing large trailers. The Volkswagen scandal shines a negative light on diesels, especially concerning their emissions. However, the real lessons here are that an automaker cheated the system and that meeting increasingly stringent clean emissions standards is tough. But it is possible.

In addition, the diesel’s advantage may be diminished due to traditional gasoline-fueled cars making significant gains, the proliferation of hybrids, and the currently low price of regular fuel.

Best advice for shoppers: Cast a wide net when starting your new-car research, considering all options and engine types, as you winnow the list down by focusing on road test performance, safety, reliability, packaging, and other factors that matter most to you.

How Dirty Are the Volkswagen Cars?

The EPA estimated that the cheating VW diesels polluted at up to 40 times the emissions standards for nitrogen oxides – a pollutant connected with respiratory and cardiovascular symptoms and diseases.

However, that estimate was measured under maximum vehicle load and throttle. Under normal operating conditions, the emissions were more in the range of 10 to 20 times over the federal limit.

Wasn't That False Advertising?

The Federal Trade Commission thinks so. The FTC has filed suit in California federal court against Volkswagen Group of America, seeking compensation for consumers who were deceived by the automaker’s “Clean Diesel” advertising as it cheated on government emissions tests. VW marketed the 550,000 diesel vehicles sold in the U.S. as environmentally friendly and placed a premium price on them.

The crux of the suit states that, because of the emissions-defeat device, VW claims about low emissions, nitrogen oxides reductions, emissions compliance, eco-consciousness, and comparative resale value were false or deceptive. As a result, consumers didn't get the benefit of the environmentally friendly car they thought they were purchasing, and resale values likely will fall.

How Do I Voice My Concerns?

There are multiple outlets, starting with the commenting feature below. Further, VW owners are encouraged to comment on Consumer Reports stories platform.

You also can send a letter to the company, and you can contact the EPA.