Fresh scandal at VW over CO2 and MPG levels extends to petrol models
According to VW "irregularities" in CO2 emissions levels and miles per gallon (MPG) ratings have been wrongly certified, which could affect around 800,000 cars in Europe and although the issue affects mainly diesel cars, petrol models have also been brought into the latest scandal. The internal investigation revealed that CO2 and fuel consumption levels were "set too low during the CO2 certification process", indicating that VW could have cheated on these levels, as well as NOx emissions levels. A VW spokesman confirmed the latest scandal affects Audi, Seat, Skoda and VW cars with what are described as "small" engines, including 1.4-litre four-cylinder petrol engines with Cylinder On Demand technology and VW BlueMotion diesel models with three and four-cylinder diesel engines. The company said it has set aside £1.4bn to cover the cost of this latest revelation. The latest revelation could impact VW's competitors and increase consumers’ concerns over purchasing both petrol and diesel engines.

The crisis at Volkswagen has deepened after the carmaker found “irregularities” in the carbon dioxide levels emitted by 800,000 of its cars.

An internal investigation into the diesel emissions scandal has discovered that CO2 and fuel consumption were also “set too low during the CO2 certification process”, the company admitted on Tuesday night.

The dramatic admission raises the prospect that VW not only cheated on diesel emissions tests but CO2 and fuel consumption too.

VW said it estimated the “economic risks” of the latest discovery at €2bn (£1.42bn). The company said the “majority” of cars involved have a diesel engine, which implies that petrol cars are involved in the scandal for the first time.

Matthias Müller, chief executive of VW, said: “From the very start I have pushed hard for the relentless and comprehensive clarification of events. We will stop at nothing and nobody. This is a painful process, but it is our only alternative. For us, the only thing that counts is the truth. That is the basis for the fundamental realignment that Volkswagen needs.”

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VW said it will now work with the authorities to clarify what took place during the CO2 tests and “ensure the correct CO2 classification for the vehicles affected”.

Müller added: “The board of management of Volkswagen AG deeply regrets this situation and wishes to underscore its determination to systematically continue along the present path of clarification and transparency.”

VW has already admitted fitting a defeat device to 11m vehicles worldwide that allowed them to cheat tests for emissions of nitrogen oxides. The carmaker has put aside €6.7bn to meet the cost of recalling the 11m vehicles, but also faces the threat of fines and legal action from shareholders and customers.

The company has hired the accountancy firm Deloitte and the law firm Jones Day to investigate who fitted the device into its vehicles. It is understood that the carmaker believes a group of between 10 and 20 employees were at the heart of the scandal.

Martin Winterkorn stepped down as chief executive of VW after the discovery of the defeat devices.

In a statement, the supervisory board of VW, which includes government and employee representatives, expressed their disappointment at the CO2 revelation.

It said: “The supervisory board is deeply concerned by the discovery of irregularities found when determining CO2 levels for the type approval of Volkswagen Group vehicles. These irregularities came to light during the clarification process which, as announced, is being relentlessly and comprehensively pursued.

“The supervisory board and the special committee set up for the purpose of clarification will meet in the very near future to consult on further measures and consequences.

“The supervisory board will continue to ensure swift and meticulous clarification. In this regard, the latest findings must be an incentive for the supervisory board and the board of management to do their utmost to resolve such irregularities and rebuild trust.”

Carl Tobias, corporate law expert at the University of Richmond, said: “Although the information is incomplete, VW needs to stop the daily drips of harmful news which leave legislators, regulators, owners and potential customers wondering what is coming next, tarnish the brand and cost the company more expense.”

The widening of the scandal comes a day after Porsche, which is owned by VW, was also dragged into the crisis.

The Environmental Protection Agency (EPA) in the US, which uncovered the initial emissions rigging at VW, claims the carmaker installed defeat devices in VW, Audi and Porsche vehicles with three-litre engines in models with dates ranging from 2014 to 2016.

The EPA made the allegations after conducting further tests on diesel vehicles in the US since VW’s admitted in September it had used defeat devices to cheat emissions tests.

The new EPA accusation covers sports cars including the 2015 Porsche Cayenne as well as the 2014 VW Touareg and the 2016 Audi A6 Quattro, A7 Quattro, A8, A8L, and Q5. In a statement VW denied it had fitted any devices on these vehicles.

However, Cynthia Giles, assistant administrator for the office for EPA’s enforcement and compliance assurance, said: “VW has once again failed its obligation to comply with the law that protects clean air for all Americans. All companies should be playing by the same rules.

“EPA, with our state and federal partners, will continue to investigate these serious matters, to secure the benefits of the Clean Air Act, ensure a level playing field for responsible businesses, and to ensure consumers get the environmental performance they expect.”

The EPA has issued a second notice of violation (NOV) of the Clean Air Act to VW as a result of its findings. VW faces fines of up to $37,500 per vehicle, which means an extra $375m (£243m) could be added to its penalties if found guilty. The company already faces a potential $18bn fine for the initial recall by the EPA in September of 482,000 VW and Audi cars.