Exclusive Exclusive: Volkswagen had Indications of Diesel Violations in May 2015

Germany’s largest carmaker Volkwagen had initial evidence as early as May 2015 that illegal software had been installed in its cars to cheat emissions tests, Handelsblatt has learned. “According to the current state of investigations, it appears evidence began increasing, starting in late May 2015, that software might have been used that violated U.S. law,” the firm wrote in a 115-page statement of defense against German shareholders suing VW for compensation, which Handelsblatt has obtained. In May 2015, a staff member of the legal division received information on “the potential use of a so-called defeat device,” according to the document. The software programs, it is now known, were installed to artificially lower emissions during tests. Despite the suspicion, the legal expert did not take any action, VW said in its legal brief. Yet, this was not the only information the company received about the use of defeat devices. On July 27, 2015 the then chief executive, Martin Winterkorn, and the head of the VW brand, Herbert Diess, met with technicians to discuss faults in some models. Off the record, the “background of the diesel issue” was discussed, according to the statement. “During this discussion, some VW employees might have for the first time said that at the bottom of the diesel issue was a software modification to influence emissions performance in test situations,” the statement said. Mr. Winterkorn then asked the employees to further look into this, according to the document. The U.S. environmental agencies EPA and CARB made the Dieselgate scandal public on September 18, 2015. VW in a statement earlier this week admitted its top management may have know of emissions violations in its cars as early as 2014, but has insisted that Mr. Winterkorn was not aware of the illegal defeat devices installed until days before the EPA’s announcement. So far, Volkswagen has admitted to manipulating 11 million cars worldwide to cheat during emissions test in order to pass regulatory tests. The company has so far set aside €6.7 billion ($7.2 billion) for possible buy backs and recalls. Fines could run into the tens of billions.   Read the full story in Monday’s Handelsblatt Global Edition at 12:00 CET.