Volkswagen called them “clean diesels,” branding them as the fun-to-drive alternatives to hybrids as it dominated the U.S. market for the engine technology.

Turns out the increasingly eco-conscious buyers of the sporty German cars have been unwittingly pumping smog into the air — because of software VW installed to cheat on U.S. emissions tests.

The world’s largest automaker has admitted selling 482,000 such diesels since 2009, California and U.S. regulators announced Friday. The scandal could cost the company billions of dollars in fines and lawsuit judgments and threatens to stunt the development of all diesel vehicles.

VW’s software trick allows the cars to emit up to 40 times the legally allowed amount of nitrogen oxide, environmental officials said. The automaker will have to recall all the vehicles and modify the emissions systems at its own expense, regulators said. Additionally it could face a fine of about $18 billion, or $37,500 per car, federal environmental officials said.


“It’s pretty ugly,” Kelley Blue Book analyst Karl Brauer said. “Volkswagen has far outstripped everyone else in selling diesel cars. This challenges everything they’ve been saying about those vehicles.”

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Nitrogen oxide is among the auto pollutants that put more smog into California’s skies, Air Resources Board Executive Officer Richard Corey said.

“Under the hot California sun [nitrogen oxide] cooks and creates ozone and fine particles,” Corey said.


Many owners of VW diesels — who tend to be enthusiasts — were enraged at being deceived.

“It’s just a blatant disregard and intentional manipulation of the system,” said Priya Shah, a San Francisco owner of a 2012 VW diesel Jetta station wagon. “Not only lying to the government, but also lying to your consumer. People buy diesel cars from VW because they feel they are clean diesel cars.”

Shah said the car is likely to be her last Volkswagen.

Justin Balthrop, of Topanga, has driven four VWs over many years and just bought a 2015 Golf TDI because of its mix of performance and fuel efficiency.


He’s concerned that bringing the car into compliance with pollution limits might lower its fuel mileage.

“I was just kind of shocked that they would do that,” said Balthrop, 36.

The affected diesel models include: Jetta (model years 2009-15), Beetle (model years 2009-15), Audi A3 (model years 2009-15), Golf (model years 2009-15), and Passat (model years 2012-15).

The EPA made its charges by sending Volksagen a notice of violation of the Clean Air Act. It covers models equipped with 2.0-liter, four-cylinder diesel engines. The California Air Resources Board issued a similar letter for violations of state regulations.


Volkswagen and Audi vehicles from model years 2009 to 2015 have the software, which uses an algorithm that automatically detects when the vehicle is undergoing pollution tests and changes the way it performs.

The EPA said the device senses the testing environment by analyzing a variety of data — steering position, speed, duration of engine operation and barometric pressure.

“These inputs precisely track the parameters of the federal test procedure,” the agency wrote in its notice of violation to VW.

The test manipulation “is illegal and a threat to public health,” said Cynthia Giles, assistant administrator for the Office of Enforcement and Compliance Assurance. “We expected better from VW.”


Volkswagen admitted that the cars contained “defeat devices,” after EPA and the state air regulator demanded an explanation for the emission problems.

Volkswagen is the world’s biggest auto company, outselling Toyota and General Motors this year. The automaker issued a statement saying it is cooperating with the investigation and declined further comment.

It is also by far the industry leader in diesel car sales in the U.S. The German automaker last year sold 78,847 diesel passenger vehicles in the U.S., well ahead of its nearest competitor, according to online auto sales company TrueCar. Its corporate sibling Audi sold 15,732 vehicles during the same period.

Diesel vehicles made up about 3% of U.S. auto sales last year, similar to the share of hybrid cars. Many have viewed diesel as a promising green technology that could grow as the nation heads for more stringent fuel economy standards.


The state Air Resources Board became suspicious after hearing about emissions problems from automotive pollution analysts in Europe, Corey said. Additionally, researchers at West Virginia University, working with the International Council on Clean Transportation, a nongovernmental organization, raised questions about emissions levels.

Air board investigators started testing the vehicles on a special dynamometer — a kind of treadmill for vehicle testing — and on the open road using portable equipment.

The investigation showed the cars behaving quite differently on the open road than in EPA testing environments. The agency devised a special test that detected how software on the engine’s electronic control module was fooling the certification tests.

VW programmed the engines to detect certification tests over many years and through three generations of engines, said Dave Sullivan, manager of product analysis at consulting firm AutoPacific Inc.


Officials did not specify VW’s motivation for cheating, but some benefits might be to increase real-world performance or fuel economy, Sullivan said.

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In addition to fines, VW will likely face consumer lawsuits on two fronts, said Steve Berman, a class action attorney in Seattle who has successfully brought such cases against Toyota, Hyundai among others.

Berman said he is already preparing a lawsuit on behalf of a Marin County, Calif. owner who bought a VW because it was marketed as a clean car and “now they find out it was polluting the environment at 40 times standards.”


VW also will face what is known as a “diminished value” lawsuit because the vehicles are likely to lose a portion of their resale value because of the problem, he said.

“They will have to retool the emissions system, and that will hurt the performance of the car,” Berman said.

Luke Tonachel, director 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,” Tonachel said.


But he fumed at VW’s actions.

“Tightening government standards are making cars cleaner, and it is disturbing to learn that VW is flouting those standards,” Tonachel said. “The EPA action is important to protecting public health.”

Consumers should not read VW’s action as an indictment of all 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.”


Consumer Reports on Friday suspended its recommendation for two of the diesels, the Jetta and Passat.

VW will have to develop a fix to bring the cars into compliance with federal and state clean air, regulators said. Owners can continue to drive the cars — there is no safety issue — and can still sell them, regulators said.

But the automaker and regulators may have trouble getting consumers to bring their cars into get fixed — especially if the fix decreases performance or fuel economy, the main selling points for the cars.

“It is not like the engines are catching on fire,” Sullivan said. “They will think that if it is not broken, why fix it?”


The public relations damage may ultimately be worse for the technology than the VW brand, said TrueCar analyst Eric Lyman. Volkswagen and Audi are largely responsible for selling American consumers on the idea that “clean” diesel is a viable green alternative.

“This is going to be a blow to the progress they’ve made and may call into question whether this is a clean technology at all,” Lyman said.

Times staff writers Charles Fleming and Samantha Masunaga contributed to this report.

Jerry.hirsch@latimes.com


Twitter: @latimesjerry

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