Measuring the Cost of the VW “Cheating” Scandal… So Far

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The VW emissions “cheating” scandal has been below the fold for a couple months now, but the repercussions are beginning to hit home.VW lead

Literally.

At home.

If you are among those who own a diesel-powered VW – whether “affected” of not – its resale value has dropped by about 20 percent, according to data compiled by Kelley Blue Book. The average auction price paid for a used VW diesel last month was down to $10,674 vs. $13,196 last August.

That’s a big hit – especially for cars that (pre-scandal) were known for holding their value better than average.

But expect resale values to take a real dump come June 28 – next week –  when Uncle will finally allow VW to tell owners of some of the “affected” vehicles how much they’re going to get for turning in their cars to be destroyed. (The company has decided that “fixing” some of these cars is not economically doable; that it’s cheaper – and easier –  to just offer to cut customers a check for the value of the car and be done with it.)

Even if VW offers full MSRP (original purchase price) rather than 20 percent (or more) depreciated price, the value of other VWs will fall through guilt-by-association.VW 1

And even if your TDI-powered VW is not going to walk the Green Mile but will instead merely be “fixed” (software/re-programming in order to appease Uncle) it will take a hit, too – because it’s now public knowledge that the “fix” will probably hurt mileage and performance.

Which Uncle doesn’t care about, of course.

But people who buy diesel-powered cars do.

The taint of “scandal” has badly gimped VW sales generally. They are down 13 percent through May – and the company’s share of the U.S. market has slipped below 2 percent.

Part of this decline is due to the fact that Uncle has refused to grant the company permission to sell any new/2016 models powered by the TDI diesel engine. There are thousands of them sitting at depots, tucked out of sight somewhere… waiting. Uncle may finally grant permission next week, but it is probably too late to avert a catastrophe because we’re approaching mid-year/high summer and the 2017s will be soon be arriving at dealerships.

This virtually assures fire-sale prices of the stacked-up inventory of left-over 2016s.VW 3

This, in turn, will further depress the values of the diesel-powered VWs already in circulation – as well as VW vehicles generally.

Which will likely further gimp sales of new VWs as people shy away from the brand.

That plus double digit billions in actual and potential liability in the form of fines and class-action litigation could result in VW abandoning the U.S. market and perhaps going away completely. It is entirely possible. The amount of fines alone is high enough that VW has publicly announced it may not be able to pay any dividends to shareholders; high enough that VW might not make a cent in profit for several years to come.

VW (which includes Audi and Porsche) is a big company, but that’s a big hit. It might not be survivable.

All of this is tragic – and it’s easy to blame Uncle, whose Inspector Javert-like obsession with almost nonexistent emissions from cars that have harmed no one stands in sharp relief to his shrugging indifference about millions of mandated air bags that have actually killed people.Uncle pic

But VW has not helped itself – much less its customers – by failing to defend itself.

Yes, the company “cheated” on Uncle’s tests.

So what?

The tests are based on standards that have become all-but-impossible to comply with. That are laid down – by Uncle – with no regard for the cost vs. the benefits. Which benefits – contrary to what most people assume – are barely quantifiable at this juncture. We are no longer talking about whole number differences but fractional ones. It is not 1974 – or even 1994. The tailpipe emissions of modern cars – gas or diesel – are practically nil.

But Uncle continues his jihad – no matter the cost.

It is not enough that the “affected” VW cars would have easily met all the standards in place circa five years ago – standards that were already extremely strict. Most people are not aware of the fact that since the 1990s, harmful exhaust emissions have been reduced to almost nothing; that for the past ten years at least, EPA has been chasing fractions of the remaining 3 or so percent of what comes out of a new car’s tailpipe that’s potentially an issue, air-quality or health-wise.A2-71515070.jpg

At some point – and we’ve arguably passed it – we’ll either have to accept that internal combustion will never be 100 percent “clean” but that 97.5 percent “clean” is clean enough – or internal combustion will have to be outlawed.

Which may be exactly what the end game is.

The “affected” VWs are not – by any sane standard – “dirty.” They are – at most – fractionally less clean than prior models.

Which were extremely clean.

EPA cannot produce a single “victim” of VW’s supposed evildoing. The entire hullaballo is based on nothing more than having affronted an arbitrary regulatory standard based on a hypothetical risk to computer-modeled “victims.”

Enough, already.

That’s what VW should have said – publicly.

Our cars are not “dirty.” No one’s cars are dirty anymore.

But the government is crazy.

Or, determined to outlaw IC-engined cars (see here) but unwilling to come “clean” about that.

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Author of "Automotive Atrocities" and "Road Hogs" (MBI). Currently living amongst the Edentulites in rural SW Virginia.

44 COMMENTS

    • Hi Rich,

      I’d heard some rumblings about this; needless to say I am not surprised. My bet is you could “catch” almost any car “cheating” if you sampled its emissions under certain conditions. VWs failure to defend itself is the reason for this (the attempt to get GM). Expect such attempts to proliferate.

    • Hi Chip,

      Yup. I hope VW can survive this, but I would not be surprised if not. Think about what the “unintended acceleration” debacle did to Audi.

      And this is much worse.

      • They’ve already said they’re looking at majorly reducing the number of models they build by 40 or so. This is across all of the VW empire (entry-level Skoda, Seat, and maybe even the premium brands like Audi, Porsche, Bentley and Lamborghini)

        40 is a huge number, and frankly I’m surprised they even had that many models. Market segmentation run amok, even worse than at BMW.

    • and just the next day a “mass shooting” in germany… trying to kill the VW headlines i suppose…

      “The shareholder’s meeting in Germany today was … rambunctious. The investors tried *twice* to get new VW chairman Hans Dieter Poetsch removed as meeting host. Looks as if the Porsche and Piech families opposed the vote (they hold 52% of Volkswagen AG).”

  1. This engine runs on just about anything …

    The factory-built GEET “‘Demo’ engines are capable of
    running on waste materials mixed with gas.

    Some examples are: lamp oil, used and new engine oil, pig manure,
    transmission nuid, soda pop, pickle juice, and the list
    goes on.

    These units are for testing and demonstrating the rechnology. They have no float, and must be manually operated. The fuel chamber is a glass jar, so during
    the demonstration viewers can see the “fuels” being vaporized
    in the tank

    These units were built specifically for demonstrating that GEET works and to develop theories of operation. They have no hookups for loads.

    GEET small engine conversion plans
    http://www.auricmedia.net/wp-content/uploads/2013/06/GEET-Small_Engine_Conversion_Plans.pdf

    GEET inventor Paul Pantone has been robbed
    http://beforeitsnews.com/alternative/2015/08/inventor-paul-pantone-attacked-and-robbed-3201678.html

    GEET inventor Paul Pantone, who got Hep C while in prison, is dead
    http://pesn.com/2015/12/14/9602703_Paul-Pantone-has-passed-away/

  2. I am appalled that not one single CEO and/or president of a manufacturing company has a pair. The car industry, the outboard industry, the heavy equipment industry, etc., not one will stand up and say enough is enough! Our engines ARE clean so GFY!

    • Fascism throws your high school economics class out the window. If you were a Manufacturer – and the Government agreed to pass laws that PROTECTED your industry from new, more efficient, startups and foreign competition, Why on Gods green earth would you want less regulation? You assume Manufacturers want to reduce cost. They want PROFIT and in a Fascist system cost has nothing to do with profit whatsoever.

  3. Really this system can’t burn down fast enough ! Then we can legitimately start over. Anything less is like trying to patch a series of ax cuts with band-aids

  4. Living in Vermont, I am surrounded by lib-tards. Many own VW TDI’s ( and Audis) .They are a status symbol of sorts for the “smug class” . Yesterday as I was filling my Tacoma with gas , I looked over to see a short haired manlet filling up her VW wagon with diesel. The car had a Bernie 2016 on the bumper on it. I couldn’t help but relish the bitter irony. Miss Manlet’s car just lost 20% of its value thanks to the policies promoted by the sociopaths that her tribe votes into office. Karma is a bitch!

  5. It all happens so fast. Germany a minute ago was the freest coolest place where you could do your thing without issue.

    Now their a vermin refugee muslim hellhole up to their eteballs in backwards regs. No nukes. No IC engines. No insulting any tinpot nutbag about his saintly flying squirrel or its off to jail.

    150 years ago, half the world was running around naked. Doing their , primitive thing in peace. Then those National Socialist Geopoliticians came around taking pictures. And building them buildings to learn the categoricals and the imperatives. And how to buy clothes. And processed foods.

    Is it really progress if you’re captured by geographic socialists and religious agencies and national military cabals and forced to civilize or die. To be the more equal pigs that wear clothes, and become literate and cultured pigs. But always swine just the same with no freedom, just a kind of softness and dependency that makes you cling to your societal Stalin roosters like the plucked chickens you’ve somehow become.

    What I Learned From Visiting China – harryp
    https://www.theburningplatform.com/2016/06/21/what-i-learned-from-the-far-east/

  6. I can’t believe I’m writing this but, perhaps it will take Trump to win and put the EPA in its place. He seems to be enough of a pragmatist that he might, might, just look at the Executive Branch regulatory structure and rip it out root and branch.

    He knows what these little dictators are like, although he’s played ball with them when needed, and it might be time for him to exact his revenge.

    I know Hillary will put the “pedal to the metal” (to use a very inappropriate metaphor) and put an end to the freedom to move about as one pleases. First Amendment “freedom to peaceably assemble”? Not a chance.

  7. This issue affects me, but not my 2005 Passat TDI.

    To wit: The whole issue of the EPA is little more than a sock puppet for the fascism in which we find ourselves. It is very much like the old Viet Nam remark about having to burn down a village in order to save it.

    Whiskey Tango Foxtrot ?

    This is really just economic warfare against European financial interests, and against us. What I do not like is the process of controlling the economy, and those (both D and R) who are killing us.

    Still do not think we are in the Fourth Reich ?

    2005 Passat TDI
    1988 Citroen 2CV6

  8. Well the Obama Administration ,did the same thing to Caterpillar Truck when asked for a waiver for the more stringent heavy diesel teir engines ,they wouldnt grant it,Cat used to offer a flavor of truck engine for every app,from the smallish C7(great school bus engine by the way,in VA the state govt made the bus companies reduce the power output of these engines almost in half,cant have a school bus that doesnt hold up traffic everybody knows buses have to be slow and stodgy like the state govt) to the mighty 3406 a good match against the mighty Cummins .
    There are reasons this happened perhaps not good ones ,it seems even these clean diesel engines emit nasty little buggers called nanoparticles,which can go pretty much anywhere they choose in the Human body and sometimes the overall consequences are not pretty.
    One thing that bugs the heck out of me is the quality of the diesel fuel I get from the pump anymore,this stuff seemingly smells different everytime I fill up,some of the off road fuel has so much water in it filter changes seem to occur with twice the frequency now .As long as productive people depend on ICEs for a lively hood the great mass of soft handers will bitch about it.(they will have a rude awakening when the “Wholefood ” stores have empty shelves)

    • Day before yesterday the wind was barely blowing across I-20. The diesel smell had sort of a burnt fool/vegetable smell, probably because of Love’s 15% and T/A’s 10% biodiesel. I sometimes fuel at an Alon with no biodiesel but it’s a PITA since you have to take your card in, walk all the way back to the diesel pumps well off to the side, fuel, go back in, find some idiot who remembers how to work the computer for it. Then it goes to a card scanner and then you take your card back, swipe it and wait. The phone line is so slow you might have to stand there for a minute or two while it says it’s working. Then it finally finishes and you can sign on the screen. After that, they PRINT two receipts, one of which you sign(again) and you’re finally through. It’s so insane I avoid it even though I keep strict records of the mileage of each fuel and it’s a no-brainer to buy the straight diesel. Diesels used to have that nice, sweet smell but now it’s more of a gagging type thing, nasty, burnt smell of what I earlier described.

      Every day there are brand new trucks on the side, hood’s up, technicians truck beside it. Step Child has a 60 Series Detroit and while it was built ground up to be computer controlled, it is a minimal program even though it’s drive by wire. It you slow down for a long distance it will hiccup the first time to try to throttle and downshift so you have to hit it once and then again when it will act normally, my only real gripe but it’s liveable. Of course the 60 series has been dropped due to Uncle and his new FUBAR. A friend asked me why it had been dropped. I told him because it wasn’t made for the new EGR/DEF bs. He said it was because they were such solid engines with long lives and virtually no problems. Well said since they’re still being rebuilt and used till Uncle bans them. Old 3406’s are valued as well and people would rather rebuild one than to upgrade. The new models sound nothing like the old ones. The old ones are so smooth idling they sound like a deep bass soundtrack hooked to a fan. Breaks my heart and everybody’s pocketbook. Somebody’s got to absorb those costs.

        • Could be ,PTB,you may have something,the odors range from asphalt,ammonia ,paint thinner,diesel occasionally,shoot might be getting a tankful of “trans fuel ” ever so often.I trust my sense of smell and I believe a consistent product should smell consistent.
          Talking about stinkers ,I followed two pretty new state mowing tractors for a ways today they were the blue ones and they smelled bad,my brothers New Holland Skid steer still has a prechamber engine,I thought they got away from those things years ago,you have to usually heat a prechamber engine to start them in the summer,with that quenching going on ,it doesnt seem they could be too clean,some of the direct injection engines are sweet smelling by comparison,tier 3 was probably good enough ,tier 4 is only achievable at great cost.The beat goes on nobody in the govt understands cost benefit.

      • “sort of a burnt fool/vegetable smell”
        What do burnt fools smell like? LOL Like Nebraska, where the wind pumps the water and the cows chop the wood?

    • I work around loggers and truckers. All the loggers I know haver nearly every one I know upgraded with equipment with Tier 3 motors in them. Since then sales for dealership have dropped right off. No one wants to buy the harvesting equipment with Tier 4 motors in them. The truckers all went with Western Star “glider” kits. You saw all these wood haulers who were Peterbilt, Kenworth, Volvo/Mack loyalists suddenly stampeding to buy Western Star gliders. All so they could get around the criminally insane mandates. But I hear that the incompetents in .gov are soon going to render this no longer an option. Really this system can’t collapse quick enough. Its utterly unworkable.

    • If you are getting water in your fuel the most likely culprit is that the station owner is a cheap-ass. Can’t tell you the all of the shady bullshit I have seen from these types trying to save a buck (usually spending a dollar to save a dime). Ignoring line tightness tests, shutting off the alarms on the veeder-root, etc…, then they say ‘
      my tanks aren’t leaking, I’ve got water coming in’. :facepalm:

  9. Conspiracy theory? No. Tt the commissar’s central government(s) plan for the prols. We should just shut up and like it.

    Germany and India Aim to Have All Cars Electric by 2030
    (TSLA) 2016-06-16 http://www.finall.net/Financial/Analysis_Fundamental/8814.html

    The German government has announced that by the year 2030, all new cars registered in the country must be electric vehicles. Earlier this year, the government of India announced a similar plan with the same deadline. Norway and the Netherlands are considering similar measures. These pushes come amid renewed international concern about pollution and climate change, even as the price of oil remains subdued. The news could be a blow to traditional automakers who resist the change in the U.S., Europe and Asia, but also a boon to electric car companies such as Tesla Motors Inc. (TSLA). Shares of TSLA are up 2.5% this morning. (For more, see also: Can Electric Cars Replace Gas Guzzlers.)

    • Geez Louise, India doesn’t even have enough electricity for normal use, let alone charging all the cars.

      • No where does. There isn’t a single place on the earth that could handle a large percentage of electric cars.

        That reason alone ensures that electric cars cannot completely replace ICE cars.

        • They aren’t supposed to completely replace ICE cars. Automobiles for ordinary people are supposed to go away. The grid will only be able to handle so many electric cars so that’s how many there will be. Everyone else just won’t be using automobiles.

          • Oh BrentP, you conspiracy theorist, you.
            And if some of us mundanes have to sacrifice having electricity in our houses so the elite can charge their cars, TS Charley.
            As Gary North is wont to say, “I don’t care about conspiracy theories. I’m much more interested in conspiracy facts.”

              • Hi Gottcha,

                I think the conspiracy is against reasonableness.

                As I’ve been ranting about for years, by any sane measure, vehicle emissions have been a non-issue for years. The object seems to be a “zero emissions” IC car, which isn’t possible. A 97 percent emissions-free car is – but that’s not enough for Uncle.

                Draw your own conclusions.

  10. I’m not in the market for a car at the moment, but if I were, and if I had sufficient wealth to do so, I’d buy every VW diesel I could get my hands on, if only out of sympathy for the company (but I also love diesel vehicles as a class).

    • Hi Lib,

      I contacted VW, offered to help in any way I could. They decided to roll over and so are Doomed. There is no placating Uncle.

      Ever.

      • Dear Eric,

        That’s sad.

        Morally speaking, VW “cheating” the DC clovers is akin to a mugging victim “lying” to the mugger about how much money he has on his person.

      • but you can always compromise (your ideals, values, beliefs, integrity). in fact, they always want more and more compromise… i should buy some stock in it.

        “There is no placating Uncle. Ever.”

        • Hi Tits,

          True, that.

          I admit to sometimes thinking that maybe I ought to have. I’d have no money worries, that’s for sure.

          But then, money isn’t everything and at least I know in my own heart that I am not a sell-out/tool like Hannity or Beck.

      • One question: How good are the VWs with the dammed TDI engines? I mean how good is the rest of the car? Do they last? Good body, suspension, electrical, etc?
        I haven’t bought a new car since 1972 and travel around in a fourth hand ’97 Avalon (337,000, original everything except oil, antifreeze, tranny fluid, tires, brake pads, rotors, etc.), so I don’t have a clue how much maintenance those doomed VWs take, but I sure feel like getting one or two right now before they disappear.
        Any thoughts?

        • Hi David,

          They seem to be. VW has – had – a very loyal following. The one sore spot I’m aware of is the DSG automatic, which is available in some models. It is very expensive to replace (not repair) and (apparently) not the most reliable transmission ever made.

  11. I am getting very interested in buying a used Sportwagen TDI. I just would stay away from VW dealers who might ruin the fuel mileage.

    • Not sure how you think you are going to get away with it, unless you are ‘off the net’ and don’t intend to title/register it.

  12. In general, resale value has no meaning for me, because I don’t sell cars. I buy them and run them until it is no longer practical to do so. But now my TDI Sportwagen, which should have lasted many more years for me, is not practical to repair solely because of this EPA crap. Yet somehow I doubt that VW, even under duress, will pay me what the car should be worth to me.

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