09 October, 2015


Affected U.S. vehicles (~482,000 total)

VW Jetta TDI (Model Years 2009 – 2015)
VW Jetta SportWagen TDI (Model Years 2009-2014)
VW Golf TDI (Model Years 2010-2015)
VW Golf SportWagen TDI (Model Year 2015)
VW Beetle TDI and VW Beetle Convertible TDI (Model Years 2012-2015)
VW Passat TDI (Model Years 2012-2015)
Plus Audi A3


This scandal is an existential threat to VW. This based on the financial and legal risks they face along with the possibly fatal loss of confidence in the brand of what is now the world's largest automaker.

Driving through Houston, I've already seen billboards soliciting plaintiffs in anti-VW lawsuits. Television commercials normally targeting medical malpractice and "bad" medical devices and drugs, are now sharing the spotlight with ads against VW. Since emissions compliance is regulated at the federal, state, and in many cases county levels, VW faces lawsuits from potenitially hundreds of entities. Harris County Texas, where Houston is (mostly!) located, has already filed suit.

I imagine individual owners could easily find lawyers willing to prosecute suits based on fraudulent and deceptive trade practices. VW faces a "death of a thousand cuts" scenario.


The California Air Resources Board (CARB) that rules over emissions law in that state and indirectly in other states, has announced that it will not, for the moment, take action against owners or their cars when it comes time to register or sell their Volkswagen diesels. "There should be no impact at this point, because the investigation is ongoing," CARB spokesman David Clegern told Consumer Reports.


It's been pointed out that there is no absolute leverage (under current law) by which municipalities and even the federal government might compel owners of affected cars to accept a software solution. And folks may resist such a solution if it is perceived as adversely impacting mileage, performance, or driveability. In jurisdictions where there is no standard for diesel emissions or a testing protocol as part of the registration and safety inspection process, a large number of car owners may choose to simply shun any fix. 

I have to speculate that enterprising individuals may create a market for "black market" engine control firmware "downgrades" that reverse the VW fix, whatever it turns out to be.


Wholesale auctioneer Manheim typically sells about 50 used TDIs per week, among those models involved in the emissions debacle, with about 70 such cars listed for 'upcoming auction.' However, Manheim’s most recent numbers are 15 cars sold and 11 cars listed.SIX POSSIBLE VW TDI DIESEL RESOLUTIONS

Resale values in the U.S. have taken a substantial hit in the weeks since the emissions scandal emerged, falling an average of 13%, or about $1,700 per vehicle since mid-September as car dealers stay away from the tainted vehicles, according to respected used-car pricing guide Kelley Blue Book.

“Early indications from auctions are that dealers are more hesitant to buy the VW diesel units,” KBB’s lead product analyst Tim Fleming said. “Used car values typically decline at this time of the year, but the large price drop on the VW diesels certainly stands out.”

The number of affected VW diesel cars being sold at auction has also tumbled 27% in the last two weeks, KBB says.


Affected owners should “wait and see” if VW decides to issue compensation (direcSIX POSSIBLE VW TDI DIESEL RESOLUTIONSt cash, credit towards another VW), a buy-back, etc.) or issues a widespread recall. Owners are smartest to refrain from immediately selling their cars. Any sale in the short term will be for a low value, since dealers have yet to find out the necessary costs of repair for these vehicles. Additionally, Volkswagen has yet to announce its solution, deterring potential buyers who may have to deal with further action from the auto maker.

In the three states (California, Texas, and Florida) with the most VW diesel cars caught up in the emissions scandal, only California withholds registration renewals from cars that fail to comply with recalls. In Texas and Florida, which have the second- and third-highest number of VW diesels after California, there are no emission standards in place for diesel vehicles.

Nationally, only 17 states are required by the Clean Air Act to confirm that owners of cars subjected to a recall show proof they have complied with it betoughfore they are allowed to take an emissions test required to register their cars, the Environmental Protection Agency said.


The following fixes/resolutions are ranked from most likely to unlikely:

1) "RE-FLASH" THE ENGINE CONTROL UNIT FIRMWARE TO REMOVE THE "TEST CHEAT": VW hopes that a simple software fix will work, and this is the most likely fix according to VW. I doubt this for an inescapable reason: if such a simple solution to the emissions and performance issues existed, VW engineers would have done this to begin with. Obvious issue with this sort of easy modification is owners may object that performance and driveability are sufficiently changed (for the worse) as

2) USE MORE ADBLUE (DIESEL EXHAUST FLUID (DEF)/UREA): For the subset of vehicles already fitted for selective catalytic reduction (SCR) and accompanying urea tank, VW states that a combination of both a software fix and greater use of ADBLUE may allow TDI's to comply with U.S. emissions regulations. This approach might work for 2012-2015 Passats and 2015 Golfs. VW would probably be compelled to supply owners the additional ADBLUE at no charge, but again the specter of the car not being what they bought (requires more frequent refill of Adblue fluid).

3) CASH COMPENSATION FOR CURRENT OWNERS: VW will most likely be required to send each owner of an affected vehicle a payment of some sort to account for diminished resale value, reduced mileage and performance, and increased future service costs. How this value gets determined and owner's rights to reject it in pursuit of a larger settlement is a question.

4) RETROFIT AN SCR SYSTEM: Doing this would be complicated, time-consuming (for VW, dealers, and owners) and expensive. Adding SCR (avoidance of which probably got them into this mess in the first place); the urea tank, filler location, associated pumps, sensors, plumbing, and wiring to vehicles in the field would be a 6) SWAP OUT NON-COMPLIANT TDI's FOR NEW MODELS: major undertaking. Owners would not be thrilled with losing trunk space, fuel tank capacity, or possibly the spare tire to the urea tank, along with the cost and inconvenience of having to periodically refill the fluid. This fix could cost VW $5K - 8K per vehicle.

5) JUST BUY BACK THE CARS OUTRIGHT: Any TDI that could not be brought into compliance with software tweaks owners would accept would be bought back and destroyed. VW stated that average buy back price would be $15,000.00 for a total cost of $4.5 Billion.

6) SWAP OUT NON-COMPLIANT TDI's FOR NEW MODELS: VW stated this would be the most costly solution.

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