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With 11 million cars affected worldwide, €6.5 billion ($AU10.28 billion) set aside to fix the problem, and facing $US18 billion ($AU25.56 billion) in fines, the scandal enveloping Volkswagen is shaping as the largest in automotive history. So what have VW actually done, and how did they get caught?

VW’s software fix while testing

Volkswagen stand accused of fitting cars with diesel engines with a ‘defeat device’ – a chunk of software that is able to detect when the car is undergoing emissions testing, which then ensures all emission controls are fully functioning as the test takes place.

How does the car know it’s being placed into test mode? Consumer Reportsdetails how VW, and many auto-makers, have a test mode that overrides certain things like traction control. That’s because the car is placed onto a dyno and needs to operate with front wheels spinning but back wheels stationary.

Having a test mode itself wasn’t the problem, it’s that VW look to have utilised that mode to enable emissions limits.

Once the test is over, the cars cease to utilise the emission controls – which significantly reduce fuel economy – and according to the United States Environmental Protection Agency, “during normal operation, [the vehicles] emit nitrogen oxides, or NOx, at up to 40 times the standard”.

The EPA went on to explain that NOx pollution is linked to respiratory and and cardiovascular diseases, and in some cases even death.

“Using a defeat device in cars to evade clean air standards is illegal and a threat to public health,” said Cynthia Giles, Assistant Administrator for the Office of Enforcement and Compliance Assurance. “Working closely with the California Air Resources Board, EPA is committed to making sure that all automakers play by the same rules. EPA will continue to investigate these very serious matters.”

The aforementioned $US18 billion fine is based on the EPA having the power to fine $37,500 per car which isn’t up to standard, of which they estimate 482,000 have been sold in the US since 2008. Clearly, that number has risen substantially worldwide, and VW stand to lose tens of billions in recalled and refitted cars alone.

The company said in a release that the €6.5 billion “may be subject to revaluation”, and with 11 million cars to solve, one would expect that revaluation to go up.

It’s also worth noting that the EPA told VW car owners it was on the company to get their vehicles up to code, and that “although these vehicles have emissions exceeding standards, these violations do not present a safety hazard and the cars remain legal to drive and resell”.

How they got caught

While this has all blown up over the last week or so, the case against Volkswagen has been building for over a year.

However rather than a sting, the EPA got somewhat lucky in discovering the company’s systematic cheating.

In May 2014 the International Council on Clean Transport (ICCT) released a paper entitled ‘In-use emissions testing of light-duty diesel vehicles in the U.S.’.

ICCT wanted US NOx emission standards introduced in Europe, and thus employed researchers from West Virginia University to gather emission data.

“Some people have mischaracterised what our role was,” Dan Carder, interim director of the University of West Virginia’s Centre for Alternative Fuels, Engines and Emissions, told IEEE. “Some have used the phrase ‘tipped off the EPA’. But we were just working under contract.”

While the cars in the paper were referred to as ‘Vehicle A’, ‘Vehicle B’ and ‘Vehicle C’, the discovery that emissions on the road were vastly different to those under test conditions piqued the EPA’s interest.

“We presented this in a public forum in San Diego, in the spring of 2014; we said, these are two vehicles; we’re presenting what we can present,” Carder said. “And EPA people were in the audience.”

Over a year later the case was brought before Volkswagen, who were quick to admit their wrongdoing, with US chief executive Michael Horn saying on Monday the company had “totally screwed up”.