Volkswagen's Diesel Deception Ends In Prison Time For 4 Former Executives
Four former Volkswagen AG (OTC:VWAGY) executives received prison sentences on Monday for orchestrating a decade-long emissions cheating scandal that cost the automaker over $30 billion in fines and accelerated the industry’s shift toward electric vehicles.
What Happened: A German court in Braunschweig convicted the high-ranking managers of fraud after a three-year trial examining their roles in installing software that manipulated diesel emission tests to deceive regulators, reported The New York Times.
Jens Hadler, who oversaw diesel engine development, received the longest sentence at four and a half years, while engine electronics manager Hanno Jelden got two years and seven months.
Two other executives received suspended sentences ranging from one year to one year and 10 months.
Judge Christian Schütz described the fraud as “particularly serious,” calling the managers a “gang” who conspired to hide emissions violations dating back to September 2007. The software allowed vehicles to recognize testing conditions and temporarily increase emission controls while operating with truck-level pollution during normal driving.
More than 30 former Volkswagen engineers and managers await trial, including former CEO Martin Winterkorn, whose proceedings remain suspended due to health issues
Why It Matters: The scandal transformed European automotive markets, reducing diesel’s share from over 50% in 2015 to less than 10% today, while electric vehicles now command 25% market share. Volkswagen has pivoted to electric vehicles, becoming Europe’s leading EV manufacturer and outselling Tesla Inc. (NASDAQ:TSLA) three-to-one in April.
The convictions follow previous EU fines totaling $1 billion against Volkswagen and BMW for delaying clean emissions technology. Volkswagen recently announced plans for a $20,000 electric vehicle by 2027 and autonomous ride-hailing partnerships with Uber Technologies Inc. (NYSE:UBER) starting in Los Angeles.
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