Many of us remember the mass recall of hundreds of thousands of Volkswagen (VW) cars in 2015. Some may recall that it had to do with the company installing illegal software in diesel engines to cheat U.S. anti-pollution tests. Most thought that the recall would long deter such behavior. But, here we are. Less than four years later, VW faces another investigation by the Kraftfahrt-Bundesamt (KBA) and another potential recall.
The KBA launched an official investigation into VW models equipped with the 1.2-liter diesel engine, including popular models like the Passat. The vehicles’ software allegedly allows VW to cheat emissions tests — a charge with which the company is intimately familiar. The charge could be a special blow to VW’s reputation following the company’s public denial of illegal activity in 2016. However, VW has hitherto cooperated with the KBA.
VW managers could face prosecution for fraud, and the KBA could take as many as 30,000 cars off the road. Such a recall could have a gigantic economic impact on the company. In a much less dire — and far more likely — scenario, the KBA could order VW to perform further remedial work.
The potential economic trouble comes at an unfortunate time for the company as it enters the electric vehicle battery race. Fraud charges could put a damper on the speed with which VW enters the vehicle battery market, leaving an opening for other European competitors.