The EPA's September 2015 Notice Against Volkswagen

On September 18, 2015, the U.S. Environmental Protection Agency issued a formal notice of violation to Volkswagen Group of America, alleging that the company had installed software in diesel vehicles designed to cheat on emissions tests. The notice centered on roughly 482,000 vehicles sold in the United States between 2009 and 2015 that contained what became known as "defeat devices"—code that detected when a vehicle was undergoing laboratory testing and altered engine performance to pass emissions standards, then reverted to higher-emission operation during normal driving.

This was not a minor compliance issue. The EPA found that these vehicles emitted nitrogen oxides (NOx) at levels up to 40 times higher than the federal standard during real-world driving, even though they passed official tests. Volkswagen had marketed these cars as "clean diesel" vehicles, and the deception affected millions of owners who believed they were buying environmentally responsible cars.

Key Takeaways

  • Volkswagen installed software in 482,000 U.S. diesel vehicles that turned off emissions controls during normal driving while passing laboratory tests.
  • The affected model years span 2009 to 2015 across multiple Volkswagen and Audi diesel models, primarily the Jetta, Passat, Golf, Beetle, and A3.
  • The EPA's notice triggered a criminal investigation, multiple lawsuits, and a settlement requiring Volkswagen to buy back or repair affected vehicles and pay billions in penalties.
  • Vehicle owners were may have access to to either a full buyback at pre-violation market value or an approved emissions repair, plus compensation for diminished value.
  • This violation fundamentally changed how the EPA monitors emissions compliance and how manufacturers face penalties for intentional deception.

Which Vehicles and Model Years Were Affected

The violation covered Volkswagen and Audi diesel vehicles sold between 2009 and 2015. The primary models were the Volkswagen Jetta, Passat, Golf, and Beetle, along with the Audi A3. All were equipped with 2.0-liter turbocharged diesel engines. Later investigations expanded the scope to include some 3.0-liter diesel vehicles and extended the model years slightly, but the core violation centered on these four Volkswagen models and the A3.

Owners could identify whether their vehicle was affected by checking the vehicle identification number (VIN) against the EPA's official list, which was published on the agency's website and through Volkswagen's own notification process. The company was required to notify all affected owners by mail, and owners could also contact Volkswagen directly or check the settlement website to confirm their vehicle's status.

How the Defeat Device Worked

The software, installed during manufacturing, used sensors to detect the specific conditions of an EPA test cycle. When the vehicle recognized it was in a test environment—based on factors like steering wheel position, engine speed, and acceleration patterns—it activated full emissions controls. Once testing ended and the vehicle returned to normal driving, the software deactivated those controls, allowing the engine to run in a higher-performance, higher-emission mode.

This meant owners were driving vehicles that polluted significantly more than advertised. Nitrogen oxides contribute to smog and respiratory illness, particularly in children and people with asthma. The deception was deliberate: internal Volkswagen documents later revealed that engineers knew the vehicles could not meet emissions standards under real-world conditions and chose to install the defeat device rather than redesign the engines.

The EPA's Investigation and Volkswagen's Response

The EPA's investigation began when researchers at West Virginia University noticed discrepancies between laboratory and on-road emissions during a study funded by the International Council on Clean Transportation. Initial testing suggested the vehicles were not performing as expected. Volkswagen initially claimed the differences were due to testing methodology, but further investigation by the EPA and California Air Resources Board (CARB) confirmed the presence of defeat device software.

Volkswagen initially denied wrongdoing, then admitted to the violation in September 2015. The company's CEO at the time, Martin Winterkorn, resigned within weeks. Volkswagen announced it would cooperate with regulators and develop a remedy for affected vehicles, though the path to that remedy proved complex and took years to complete.

Settlement Terms and Owner Compensation

Volkswagen ultimately agreed to a settlement that included a buyback program, repair options, and direct compensation to owners. Owners of affected vehicles could choose to have Volkswagen repurchase the vehicle at its pre-violation market value, or wait for an EPA-approved emissions repair. The buyback option was available first and was the path most owners chose, as it provided when ready resolution and compensation for the vehicle's diminished value.

In addition to the buyback or repair, Volkswagen paid owners between $5,100 and $10,000 in direct compensation, depending on the model and model year. The company also funded a $2.7 billion environmental remediation trust to support clean air projects. Federal penalties totaled $14.7 billion, making it one of the largest environmental settlements in U.S. history. Owners did not need to take separate action to receive compensation; Volkswagen contacted them directly and managed the process.

Criminal and Civil Consequences for Volkswagen

Beyond the civil settlement with the EPA, Volkswagen faced criminal charges. In 2017, the company pleaded guilty to three felony counts: conspiracy, obstruction of justice, and violating the Clean Air Act. Volkswagen agreed to pay $4.3 billion in criminal penalties and submit to enhanced compliance monitoring. Several Volkswagen executives were also charged individually; some were convicted and imprisoned.

The company faced additional lawsuits from state attorneys general, shareholders, and environmental groups. These cases resulted in further settlements and agreements to invest in electric vehicle development and charging infrastructure in the United States. The total cost to Volkswagen exceeded $15 billion when all penalties, buybacks, repairs, and settlements were combined.

What Changed in Emissions Testing After 2015

The Volkswagen violation exposed weaknesses in how the EPA tested vehicle emissions. Laboratory tests, called the New European Driving Cycle (NEDC) in Europe and the Federal Test Procedure (FTP) in the United States, could be gamed by manufacturers who knew the exact test conditions. In response, the EPA introduced the Worldwide Harmonized Light Vehicle Test Procedure (WLTP) and began conducting more on-road testing using portable emissions measurement systems (PEMS).

Manufacturers are now required to demonstrate that vehicles meet emissions standards across a wider range of driving conditions, not just in the laboratory. The EPA also increased its oversight of software and engine control systems, requiring manufacturers to disclose more information about how their vehicles' emissions systems operate. These changes make it significantly harder for manufacturers to use software to mask emissions performance.

Frequently Asked Questions

Did Volkswagen owners have to pay for the buyback or repair?

No. The buyback and repair programs were free to owners. Volkswagen paid for all costs, including towing if needed. Owners received compensation on top of the buyback or repair option.

What happened to vehicles that were bought back?

Most were scrapped or exported. Volkswagen was prohibited from reselling them in the U.S. market. Some were donated to educational institutions or used for research purposes.

Could owners refuse the settlement and sue Volkswagen separately?

Owners who accepted the settlement were generally barred from pursuing separate lawsuits against Volkswagen for the same claims. However, some owners pursued claims for other damages, such as diminished resale value beyond what the settlement provided, though with limited success.

Did the emissions repair actually work?

The EPA-approved repairs reduced emissions significantly but did not bring all vehicles to full compliance in all conditions. Owners who chose repair over buyback accepted this trade-off in exchange for keeping their vehicles.

Has Volkswagen faced similar violations since 2015?

No major violations of this scale have been confirmed. Volkswagen has faced smaller compliance issues and recalls, but nothing comparable to the 2015 scandal. The company has invested heavily in electric vehicles and compliance infrastructure.