A pedestrian walks past a Suzuki Motor Corp. dealership in Yokohama City, Kanagawa Prefecture, Japan, on Thursday, May 19, 2016.Akio Kon/Bloomberg
Elon Musk doesn't really need any more publicity for his much ballyhooed electric-car maker, Tesla Motors, and its drive toward mass production. But the auto industry's old guard is handing it to him anyway, thanks to a deepening diesel emissions scandal that has rocked leading European and Japanese manufacturers, put a serious dent in their reputations and hammered their market value.
All this comes at a time when they are committing billions to develop their own electric vehicles.
The latest makers to more or less come clean about their murky testing practices are General Motors' Opel unit and Japan's Suzuki Motor Corp. Opel acknowledged last week that software in its Zafira minivan can shut off exhaust treatment systems to protect the engine under certain driving conditions. That would be legal. But German investigators suspect the device may also have affected test scores, which isn't allowed.
Suzuki's case is stranger. The small-car specialist admitted to "discrepancies" in emission and fuel-economy results, but insists it never doctored them to make vehicles seem greener. Yet the company also confirmed it hadn't been using the testing methods required under Japanese regulations since 2010.
This followed Mitsubishi Motors' admission last month that it had fudged fuel-economy results for four of its small-car models for years and is still looking into improper testing of others going back 25 years. With its stock price nosediving, the car maker happily fell into the embrace of much larger Nissan Motor Co., which acquired a controlling 34-per-cent stake for about $2.2-billion (U.S.).
All of this started last September when Volkswagen made a shocking admission. VW, one of the world's biggest car makers, had been cheating on U.S. emission tests for years, violating government rules and hoodwinking customers into buying vehicles that were a lot less environmentally friendly than advertised.
After first resorting to the old rogue-employees-management-was-in-the-dark gambit, VW admitted less than two months later that it had also told fibs about fuel consumption. It tossed its chief executive, chief designer and U.S. head under the autobus.
But the haughty company's rivals were in no mood to crow about its mounting woes, plunging stock price and astronomical costs to resolve the mess. With good reason.
Regulators in Germany, Britain, France and Japan all embarked on their own reviews of diesel vehicles. They discovered what environmental watchdogs had long warned: Most didn't meet stringent tailpipe emission standards, even when there was no deliberate cheating.
British transportation officials tested 56 diesel makes in Germany and 37 in Britain from the likes of Renault, Daimler, the European arms of Ford and GM and other manufacturers.
The good news was that, apart from the Volkswagen group, none had installed engine software of the sort used to falsify test results. The disconcerting news was that all of them produced higher levels of nitrogen oxide, a smog ingredient, under real driving conditions than in the lab. They exceeded European Union standards, some by a wide margin.
"Following the Volkswagen emissions scandal, the whole of the automotive industry must work hard to restore public trust by being transparent about the systems they employ and advancing plans for introducing cleaner engine technology," Britain's Transport Secretary Patrick McLoughlin said last month when the government released its findings.
Mr. Musk waded into the Volkswagen scandal last December, urging zealous California regulators not to compel the German maker to fix its diesel products. Instead, he proposed that VW be directed to use the billions set aside for the repairs to aid in the inevitable shift to zero-emission production.
"A giant sum of money [will] be wasted in attempting to fix cars that cannot all be fixed, and where the fix may be worse than the problem if the cars are crushed well before the end of their useful lives," Mr. Musk said in a letter signed by a bevy of clean-energy executives and environmental activists.
Every auto major is rushing to develop clean-engine and electric vehicles to meet tougher emission standards in the EU and the lucrative U.S. market. But those sullied by the current scandal will have a tough time winning back aggrieved customers who thought they were doing their small bit for the environment.
Plenty of them will be waiting with open arms and pocketbooks if Tesla succeeds in expanding production of a car tailored to their needs.
A year in auto-maker testing scandals
- Sept. 18, 2015 – U.S. Environmental Protection Agency accuses Volkswagen AG of violating federal laws by rigging emissions tests on hundreds of thousands of vehicles.
- January, 2016 – French police raid Renault factories as part of probe into dodgy emissions data.
- April – British authorities test various diesel makes and models and find no one apart from VW was installing devices to cheat tests. But every vehicle produced more pollutants in real driving conditions than in the lab.
- April 20 – Mitsubishi Motors admits it cheated on tests for decades. With reputation in tatters, it sells controlling stake to Nissan. President Tetsuro Aikawa and another senior executive to resign in June.
- April 21 – PSA Peugeot Citroën offices raided by French anti-fraud police. Peugeot insists its vehicles meet emissions standards in every country where it operates.
- April 21 – VW reaches deal with U.S. Justice Department to buy back or fix almost several hundred thousand cars and compensate owners, at a cost that may surpass $10-billion (U.S.).
- May 5 – Competition Bureau launches probe into marketing by Volkswagen Canada and Audi Canada of vehicles with test-cheating diesel engines.
- May 13 – German transport ministry asks General Motors’ Opel division executives to appear before a commission looking into emission controls.
- May 15 – Norway’s oil fund, one of Vokswagen’s biggest shareholders, reveals it will join class-action lawsuit against VW over huge stock losses.
- May 18 – General Motors’ Opel division acknowledges that engine software in its Zafira model can shut off exhaust treatment systems, but claims it’s legal.
- May 18 – Suzuki admits to “discrepancies” in emissions and fuel-economy results, but says it never doctored them to make vehicles seem greener than they actually are. Admits it didn’t use the testing methods required by Japanese regulations and hadn’t done so since 2010.
- May 19 – Fiat Chrysler is a no-show at scheduled meeting to discuss emissions with German Transport Minister Alexander Dobrindt.