Business Case Studies & Business Publications

The Volkswagen Emissions Scandal

Lynch, Luann J., C...

Case

The Volkswagen Emissions Scandal

Lynch, Luann J.; Cutro, Cameron; Bird, Elizabeth

S-0267 | Published July 21, 2016 | 17 pages Case

Collection: Darden School of Business

Add To Cart Buy Now

Product Details

In September 2015, VW had admitted to United States regulators that it had deliberately installed "defeat devices" in many of its diesel cars, which enabled the cars to cheat on federal and state emissions tests, making them able to pass the tests and hit ambitious mileage and performance targets while actually emitting up to 40 times more hazardous gases into the atmosphere than legally allowed. The discovery had prompted the U.S. Environmental Protection Agency (EPA) to halt final certification of VW's 2016 diesel models, and VW itself had halted sales of its 2015 models. As fallout from the defeat devices developed, VW posted its first quarterly loss in more than 15 years, and its stock plummeted. Top executives were replaced, and VW abandoned its goal of becoming the world's largest automaker. Stakeholders around the world had been asking since the scandal broke: "How could this have happened at Volkswagen?"