Auto Tech

Volkswagen should lose its fuel credits, US senator says

The automaker could face even more fines if its diesel vehicles can't meet both US fuel and emissions standards.

2014 Volkswagen Jetta TDI

Volkswagen earned approximately 34 million regulatory credits between 2008 and 2012, when it was selling diesel vehicles equipped with illegal software.

Antuan Goodwin/CNET

Volkswagen's emissions scandal could land the carmaker on the wrong side of US fuel economy standards.

Democratic Sen. Ed Markey has asked the National Highway Traffic Safety Administration to review and potentially rescind fuel economy credits given to Volkswagen for its diesel vehicles with so-called "defeat devices." In a letter on Thursday to NHTSA Administrator Mark Rosekind, the senator said the German carmaker may have incorrectly received credits as a result of its illegal behavior.

Volkswagen faces investigations and legal battles around the world after admitting in September to cheating on diesel emission tests using software hidden on its vehicles. Installed on some 11 million TDI models globally, the defeat device allowed Volkswagen's cars to spew nitrous oxide emissions, a cause of smog, in excess of legal limits. The software was used in approximately 480,000 VW vehicles in the US. The automaker has not yet laid out a full plan to fix the affected TDI vehicles.

"In light of VW's illegal use of defeat devices to circumvent emissions controls, it is my belief that NHTSA should immediately re-analyze and, as appropriate, reverse any CAFE benefits VW might have enjoyed as a result of illegal behavior," wrote Markey, a Democrat from Massachusetts.

Credits are an integral part of the government's Corporate Average Fuel Economy (CAFE) program, which aims to reduce energy consumption by increasing the fuel economy of cars and light trucks. Credits are awarded to automakers that beat fuel economy averages. The more fuel efficient vehicles a brand sells, the more credits it's awarded. These credits can be applied to future vehicles that might fail to meet standards or sold to other automakers. For example, electric carmaker Tesla reported $27 million (£17M, AU$38M) in regulatory credit revenue in just a three month period last year.

Compared to other automakers, Volkswagen doesn't have an overwhelming amount of regulatory credits. Between 2008 and 2012, when the cheating diesels were sold, VW earned approximately 34 million credits. In that same period, Honda received about 100 million credits, and Toyota earned roughly 470 million.

If Volkswagen's credits are taken away, the brand could face penalties and fines for failing to achieve CAFE standards.

"[We] cannot comment on Ed Markey's remarks other than to say that we are cooperating with government investigations related to the TDI issue," said a Volkswagen spokesperson.

NHTSA and Sen. Markey did not immediately respond to requests for comment.