Dieselgate: Internal Mails Severely Incriminate German Automakers

The history of the so-called emissions cartel of the German automotive industry must apparently be supplemented with a crucial chapter. In 2021, during the processing of the diesel scandal, the EU Commission determined in a settlement that BMW, Volkswagen, and the then DaimlerChrysler had engaged in illegal agreements on exhaust gas purification between 2009 and 2014. But now, explosive documents are emerging that push the start of this coordination much further back.

Internal emails, which the research platform Follow the Money reports on, leave little doubt: The manufacturers were already intensively working on joint strategies in 2006 to limit the use of environmentally friendly but expensive urea injection. The time span is crucial for determining the amount of sanctions.

The new details come from evidence in an ongoing proceeding before the High Court of Justice in London. There, the car manufacturers are facing lawsuits from around 1.6 million diesel owners. The documents reveal a remarkable unity among the actually competing corporations. For example, an email from Volkswagen from October 2006 unequivocally states that a solo effort by a single manufacturer at that time would have been detrimental to all parties involved. This paints a picture that goes far beyond the exchange of technical information and touches the core of competition law.

Strategic Agreements Instead of Competition

The central point of contention was the so-called Selective Catalytic Reduction (SCR), in which the liquid AdBlue is injected into the exhaust stream to neutralize nitrogen oxides. The engineers were faced with a dilemma: a sufficiently large tank for the liquid was difficult to accommodate in smaller vehicle models. A tank that was too small, on the other hand, would have forced customers to refill AdBlue regularly, which the manufacturers feared as a potential sales argument against diesel.

However, instead of competing for the best technical solution, the companies apparently sought a common way to throttle the dosage of the liquid so that small tanks would suffice. The authorities should not become suspicious, however.

The choice of words in the internal correspondence, some of which were published by Follow the Money, is telling. One employee warned at the time that no one wanted to reveal the "true motivation" for limiting the dosage to the US environmental authorities EPA and CARB. A VW engineer even described the challenge in a message to colleagues at Audi, BMW, and DaimlerChrysler as a matter of "the most skillful presentation possible" to the authorities, rather than a technical problem. It seems that the parties involved knew exactly how precarious their situation was years before the diesel affair came to light in 2015.

The Role of the EU Commission

The fact that the EU Commission only set the period of the cartel from 2009 onwards in its settlement may have had pragmatic reasons. Experts like Jan Blockx from the University of Antwerp point out that a lengthy legal dispute over the period before that would have involved high risks for the Brussels government institution. A settlement saves time and costs, but often leaves questions about a complete resolution open. Interestingly, the South Korean antitrust authority assessed the same situation much more strictly, setting the start of the violations as early as 2006.

The companies involved are largely keeping quiet or referring to the already concluded EU settlement. However, the documents from London show how politically exhaust gas purification was treated behind the scenes. A DaimlerChrysler memo stated that a uniform solution had to be found because the issue was "very political" and the decision had to come "from the very top." The plaintiffs in London see their allegations confirmed by these emails. The German automotive industry reminds them of an era when agreements were clearly more important than technological competition for cleaner air.

(kbe)