Just when Volkswagen (VLKAY) seemed to turn the corner on its more than year-long diesel emissions cheating scandal, the German automaker has been hit with new charges of faking emissions tests at its luxury car brand, Audi.
German newspapers a week ago began reporting that the California Air Resources Board had discovered a cheat device on an Audi model that regulated emissions controls on its conventional gasoline engines based on whether the steering wheel was activated.
Such a computer program could measure an Audi's CO2 emissions -- a proxy for fuel economy -- during tests by regulators and switch off emissions controls when the vehicle was being operated, thereby increasing power and hurting real-world fuel efficiency.
Over the weekend, VW responded to reporters' questions with an email saying "adaptive shift programs can lead to incorrect and non-reproducible results" during emissions testing. The email was sent to Reuters, in response to a story in the German newspaper Sueddeutsche Zeitung.
How many Audi models could be affected, whether the issue is confined to the U.S. and who from the company might have been involved haven't been publicly addressed by the automaker. But the allegations potentially raise a new set of hurdles for a top-tier automaker struggling to regain its equilibrium.
A new CEO, Matthias Mueller, has been leading a corporate restructuring and management overhaul that includes a phase-out of diesel engines and replacement with battery-powered electric vehicles. Company insiders said that criminal penalties may be a consequence for those deemed responsible for faking emissions tests.
On Friday, VW acknowledged that Rupert Stadler, CEO of the automaker's Audi subsidiary, said he would be questioned about the new allegations by the Jones Day law firm, which VW hired to gather facts relevant to the diesel inquiry.
The automaker said it had made available technical information on the software program to German authorities for further investigation.
The German newspaper Bild am Sonntag said the U.S. Environmental Protection Agency was investigating Audi in connection with the new allegations and will meet with VW engineers next week.
Since October 2015, VW has been embroiled in a scandal that so far has cost the automaker about $16 billion in fines, damages and expenses associated with reconciling claims related to its admission of falsifying diesel emission tests in the U.S.
VW shares are trading at roughly half their value of April 2015 when the company was rocked by a power struggle between its CEO and a scion of its ruling family and controlling shareholder. The chief executive, Martin Winterkorn, resigned following the diesel emission crisis a few months later.