EU fines BMW, VW $1B for running emissions cartel since the 90s
July 08, 2021 at 20:31 PM EDT
As environmental issues really came of age in the 1990s, certain German automakers were meeting in secret groups to make sure their cars would continue to industriously contribute to greenhouse gas emissions. According to the European Union, Volkswagen, Audi, Porsche, BMW and Mercedes-Benz parent company Daimler have been illegally colluding to restrict competition in emission […]
As environmental issues really came of age in the 1990s, certain German automakers were meeting in secret groups to make sure their cars would continue to industriously contribute to greenhouse gas emissions. According to the European Union, Volkswagen, Audi, Porsche, BMW and Mercedes-Benz parent company Daimler have been illegally colluding to restrict competition in emission cleaning for new diesel passenger cars, essentially slowing the deployment of cleaner emissions tech. On Thursday, the EU issued fines of $1 billion (€875 million) to Volkswagen and BMW for their involvement in the emissions cartel.
“The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions beyond what was legally required under EU emission standards,” said executive VP of the EU Commission Margrethe Vestager in a statement. “But they avoided to compete on using this technology’s full potential to clean better than what is required by law. So today’s decision is about how legitimate technical cooperation went wrong. And we do not tolerate it when companies collude. It is illegal under EU Antitrust rules. Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives. And this decision shows that we will not hesitate to take action against all forms of cartel conduct putting in jeopardy this goal.”
All parties acknowledged their involvement and agreed to settle. Volkswagen, which owns Audi and Porsche, will have to pay around $595 million, and BMW will pay $442 million. Daimler would have had to pay around $861 million, but the company is evading fines by being the whistleblower. So we guess Daimler just gets off scot-free?
BMW made a net profit of $4.62 billion last year, and VW made about $12.2 billion and nearly $23 billion in 2019, so this fine sort of feels like a slap on the wrist. And let us remember, this is not the first time VW has gotten into an emissions scandal.
In 2015, the U.S. Environmental Protection Agency issued a notice of violation of the Clean Air Act to VW for intentionally adding software into its diesel engines to make it look like it was following emissions controls, when in reality its cars were actually producing far more than the legal amount.
In its action against the companies, the EU specifically homed in on the agreement reached by the companies on the sizes of tanks used for AdBlue, a solution that mixes with diesel car exhaust to neutralize harmful pollutants. The companies agreed not to compete on making cars cleaner even though they had the tech to do so.
Der Spiegel first broke the news about the cartel in 2017, and the companies set to work greenwashing. In the same year, all of the involved parties, as well as Ford Motor Company, joined forces to create a high-power charging network for EVs called Ionity. The plan was to build and operate around 400 charging stations across Europe by 2020, but it looks like Ionity only managed to install 300 across Europe, and it even significantly increased the price of a charge by 500% last year.
Earlier this week, VW’s heavy-truck business, the Traton Group, Daimler Truck and Volvo group joined up to invest nearly $593 million in a network of public charging stations for electric heavy-duty long-haul trucks and buses around Europe.