Dieselgate - and now for the fallout

We’re nearly two months into the dieselgate scandal.

So far, most of the attention has been on Volkswagen, the defenestration of some of its most senior staff and the likely financial impact on the company.

It has already declared a £2.5 billion loss for the third quarter of 2015, as it stacks up cash to pay for the massive recall work on the EA189 engine, as well as compensation and the likely fines from governments and regulators.

The wider VW Group has already hired Thomas Sedran from Opel to be the chief of corporate strategy and promises that the all-new vision for the VW Group will be revealed in the middle of next year.

However, a couple of recent news stories reveal just how much of a quiet panic the wider European car industry is in, now that the issue of diesel pollution is well and truly under the microscope.

VW admitted that it used a software ‘cheat’ to get its EA189-engined diesel cars through the US pollution tests, after the International Council on Clean Transportation revealed that real-world tests of the firm's diesel engines showed much higher NOx emissions than were revealed in lab tests.

Immediately, demands were made that all diesel vehicles should be tested in real-world conditions and not in lab situations. The same demands were made by some politicians in Europe, although there hasn’t been much said about this until yesterday.

Elzbieta Bienkowska, who is the European commissioner for industrial policy, released details of the new EU policy on emissions of nitrogen oxides from diesel cars.

With real-world pollution testing beginning in September 2017, Bienkowska and the Technical Committee for Motor Vehicles decided that NOx emissions from new vehicles can exceed the EU6 limits by up to 110% until January 2020.

It’s hard to see this as anything other than an admission that most car makers cannot meet the real-world NOx limits without some massive investments and on a timescale that might not be achievable.

Further pressure arrived from the US, when the mighty combination of Harvard University and the Massachusetts Institute of Technology declared that the 428,000 cheat diesels VW sold in the US would lead to 60 premature deaths.

NOx emissions are now even being blamed for contributing to a decline in the bee population. To say that diesel will be on the back foot from now on, is likely to be an understatement.