The car industry has been shaken since it first came to light in 2015 that VW had been manipulating emissions.
Are you sitting comfortably? Then we’ll begin. It all gets terribly complicated. The Dieselgate scandal first came to light back in September 2015, when the US Environmental Protection Agency issued a notice of violation to Volkswagen because it had found evidence of its cars infringing the Clean Air Act.
The company later admitted that it had fitted thousands of diesel cars with devices that allowed engines to fraudulently pass emissions tests in laboratories by limiting performance.
Volkswagen has been under investigation by government authorities across the world and remains so in many countries including Germany, despite having reached a settlement in the US.
The company must pay more than £13bn in civil charges and a £2.2bn criminal fine imposed by a judge in April 2017.
Volkswagen also agreed to the publishing of a ‘Statement of Facts’, in which it outlined what had been done and how the defeat devices had achieved it.
Mechanical and software fixes have been made available – VW told its shareholders at its mid-2017 shareholder meeting that 2.3 million cars in Europe had been updated, around half of all those affected in the region.
The scandal has put pressure on car makers across the industry, with many governments now looking to introduce tougher tests for diesel engines and some major cities looking to ban diesels altogether.
Information keeps emerging
It was revealed recently by news agency Bloomberg that Volkswagen operated a top-secret testing site at its Wolfsburg headquarters that was inaccessible to all but a few company employees. There, engineers tested and uploaded emissions cheat software, a stone's throw from the executive accommodation.
US-based VW employee James Liang has also been sentenced to 40 months in prison by an American judge. 'This is a serious crime and involved a massive fraud upon the American consumer,' said district judge Sean Cox. German national Liang worked as Volkswagen's head of diesel competence in the United States.
A second Volkswagen employee, Oliver Schmidt, who was the US head of compliance, has pleaded guilty to charges of conspiracy and violating the US Clean Air Act and is awaiting sentencing. A further six VW executives have also been charged by authorities.
Who was responsible?
There are still a number of investigations ongoing around the world, but no one has been charged with wrongdoing by authorities.
The scandal has, however, claimed the scalps of Volkswagen Group CEO Martin Winterkorn, head of brand development Heinz-Jakob Neusser and Audi’s head of research Ulrich Hackenberg.
Porsche’s head of R&D Wolfgang Hatz was suspended pending an internal investigation, but he later resigned from his post in May 2016.
He was arrested by Munich police in September 2017 as part of the investigation into wrongdoing at Audi. Under German law whole companies can't be prosecuted, so local police have been trying to find evidence that individuals within the company conspired to manipulate emissions figures.
What about other manufacturers?
Other car makers have been tainted by association with Dieselgate, but none to the same extent as Volkswagen.
The whole affair has brought to light the discrepancies between officially sanctioned fuel and emissions figures – achieved in very specific laboratory conditions – and real-world driving.
The fallout from the scandal has seen Volkswagen and Audi’s sales figures drop dramatically in Germany. Porsche and Audi have also withdrawn from the World Endurance Championships and the Le Mans 24-Hour race in order to contest the electric racing championship Formula E.
Both manufacturers have by turns dominated the sport in recent years, and Audi in particular was using its entry to promote diesel power.
German manufacturers VW, Mercedes and BMW were accused in July 2017 of colluding with each other to drive down costs of components and to agree a common approach to diesel emissions systems. They’ve denied any wrongdoing.
Even Ford has been brought into the Dieselgate mess, with its Mondeo model being investigated in Germany.
What about the long-term consequences?
Market share of diesel in the German new car market is expected to drop below 40 percent in 2017, from a stronghold of 50 percent. France and Spain have seen diesel sales fall 20 percent and in the UK they’ve dropped 10 percent.
Some see Dieselgate as an opportunity for the car industry to commit to greener forms of propulsion, but industry analysts have criticised manufacturers for doggedly defending diesel.
Ultimately, both the French and UK governments have now announced that they will ban sales of pure diesel and petrol engines by 2040, encouraging the take-up of hybrid and full-electric cars.
Volkswagen made a big deal of its new electrification strategy at the 2017 Frankfurt motor show – the company might be excited about EVs now, but it's an enthusiasm brought about by a massive drop in demand for Diesel engines across Europe that was principally brought on by its own efforts.