Mendoza School of Business

How to stop automakers from cheating on emissions tests

Published: January 13, 2017 / Author: Timothy Carone

Timothy Carone

There is a long and sordid history of car companies using “defeat devices” to skirt government pollution and other mandated regulations mainly because the incentives to do so are significant. The first of these devices turned off the newly mandated emission systems when people used the air conditioning. Another device was a sensor that activated pollution controls only at the temperature regulators used during the tests.

Recent devices sensed when government devices were attached and calibrated the engine to perform in a manner consistent with what the government considered acceptable results. The car manufacturers are incented to do this because of the need to meet the challenging regulations set forth by governments world-wide with regard to things like emissions and fuel efficiency. These are difficult problems to solve and one way to solve it is to give the government what it wants, just not in the way it wants it.

VW and Fiat Chrysler are just the latest to come up with ways to manage the demanding and at times, conflicting government regulations imposed on them by countries. The VW situation is more rare with an admission of guilt and charges being brought against VW employees. The Fiat Chrysler situation is going to be more of what is seen in the future with the government claiming a company is cheating, the company saying it is complying and the devil is in the software details.

Read the entire piece on the CNBC website.