Why Volkswagen May Have Risked It All by Allegedly Cheating on Emissions

PHOTO: A model stands by a Volkswagen Jetta TDI clean diesel vehicle during the New York International Auto Show, April 21, 2011 in New York.PlayRamin Talaie/Getty Images
WATCH Volkswagen CEO Resigns in the Wake of Emissions Scandal

The emissions scandal that rocked Volkswagen this past week has auto industry experts and Volkswagen drivers asking the same question: Why did Volkswagen allow its diesel cars to be sold with deceptive software?

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“Any time you have standards or rules, some people will choose to cheat,” David Whiston, an analyst at Morningstar, told ABC News. “Volkswagen had made increasing its sales in the U.S. a priority. Part of the way to meet that goal of more U.S. sales was to increase diesel’s appeal with Americans. It appears those efforts are now wasted at least for quite a while.”

If Volkswagen had the technology to successfully pass an emissions test, why then was that same technology not in use when the car was being driven?

Whiston’s guess is that had it been in place, the car would not have met the driver's performance expectations.

“Clean diesel was meant to be for people who want great fuel economy but didn’t want a Prius because German cars are more 'fun' or 'better' to drive,” he said.

Diesel cars are typically more expensive than gas-engine cars yet they appeal to a growing number of American drivers who want better fuel economy and are environmentally conscious, explained Jack Nerad, executive editorial director at Kelley Blue Book. A delay in meeting new EPA emissions targets for diesel models would have been very costly for Volkswagen, explained Nerad.

"Rather than delay diesel introduction as others, including Honda and Mazda, did, Volkswagen decided to go ahead, but it appears that it was unable to reach emissions targets as it had hoped," Nerad said. "Thus it resorted to the software-hardware combination that deceived the EPA."

Jeff Thinnes, a former vice president for Daimler-Benz, told ABC News that "often these types of major corporate transgressions start with the belief that [a company] may be able to circumvent the law. When time passes and they are not exposed, they get more confident until they reach the feeling of invincibility. It’s about that time when the Tsunami hits.”

Volkswagen's "Clean Diesel" models accounted for 22.9 percent of its total U.S. new car sales in August, or about 7,400 vehicles, the company reported earlier this month. In comparison, BMW's diesel vehicles accounted for just 6 percent of its U.S. sales in 2014, or approximately 20,000 cars.

Nerad explained that Volkswagen was facing more restrictive emissions standards for diesels than it had encountered before.

"At the same time restrictive emissions standards are typically challenging to drivability and fuel economy," Nerad said. "This put Volkswagen engineers in a bind, while it prompted other manufacturers to delay or cancel their plans to introduce diesel engines in the U.S.”

Regulators say Volkswagen's diesel cars emit nitrogen oxides, or NOx, at 10 to 40 times the federal limit. The government accused Volkswagen of using illegal "defeat device" software that causes 482,000 of its diesel cars to cheat on emissions standards tests. Several lawsuits have been filed against Volkswagen and CEO Martin Winterkorn resigned from the company on Wednesday.

"As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the Supervisory Board to agree on terminating my function as CEO of the Volkswagen Group," Winterkorn said in a statement. "I am doing this in the interests of the company even though I am not aware of any wrong doing on my part."

Volkswagen told dealers this week to halt sales of both new vehicles and certified pre-owned cars equipped with the 4-cylinder 2.0 TDI engine. Audi, which is owned by Volkswagen, also implemented a stop-sale for its model with that same engine, the A3 2.0 TDI.

Volkswagen's troubles could also cause it to lose the "world's most sustainable automotive group" title.

Earlier this month Volkswagen was named the world's most sustainable automaker for the second time by RobecoSAM. The German automaker ranked No. 1 in terms of climate strategy, conduct, compliance and anti-corruption compared to 33 other car companies.

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