Germany’s biggest auto makers agreed Wednesday to implement software updates to their fleet of diesel cars here, a move they say will reduce emissions of nitrogen oxide. The agreement fell short of calls by industry critics for much more expensive hardware changes to emissions systems.
The deal came at a meeting between German government officials and industry representatives amid growing public outrage over a series of revelations about lax emissions standards, emissions that exceeded auto makers’ claims and outright emissions cheating in the case of Volkswagen AG . The auto maker in late 2015 admitted it installed cheat devices in millions of diesel cars around the world to help them evade emissions testing.
The anger has spilled across Europe, with a handful of cities drafting measures to curb or ban diesel use altogether in city centers.
Until recently, the engine has been a big hit in Germany. Last year, 45.9% of new cars sold in the country were diesels, compared with less than 5% in the U.S.
The German government in the past has been largely supportive of diesel cars, including with tax breaks. Germany had hoped diesel would help it meet the European Union’s aggressive greenhouse-gas emission targets. Although diesels generate high nitrogen-oxides emission levels, diesel burns more efficiently than gasoline and gets better mileage. Modern diesel cars also emit on average 15% less carbon dioxide than regular gasoline engines.
In Germany—home of diesel inventor Rudolf Diesel, as well as some of the world’s biggest auto makers—the industry wields enormous political clout. But even here, public outrage has spurred official calls for action. In Munich, Hamburg and Stuttgart, the home of Mercedes-Benz maker Daimler AG and Volkswagen’s Porsche unit, city officials have moved to ban diesel cars in their city centers.
An industry lobby group estimated the software fixes would cost Volkswagen, Daimler and BMW AG a total €500 million ($594 million) for the 5.3 million cars those companies promised to upgrade. That includes the 2.5 million diesels in Germany that Volkswagen has separately recalled and promised to fix. The industry has also agreed to pitch in €250 million for a fund to promote sustainable mobility in cities, with the German government matching that amount.
The car makers also agreed to provide incentives for drivers to trade in their older diesels. BMW, for instance, is offering up to €2,000 for older diesel trade-ins. The auto makers are expected to disclose further details in coming days.
Environmental activists have urged the government to force car makers to offer further-reaching technical retrofitting. That is something the industry opposes, calling it technically difficult and more expensive. The government agreed not to force those hardware fixes on the industry at the Wednesday meeting.
“We basically consider it impossible to apply hardware retrofittings,” Volkswagen Chief Executive Matthias Müller said.
German Environment Minister Barbara Hendricks said the more limited measures would improve air quality, but she agreed more needed to be done.
“It’s correct that software updates won’t solve the problem completely,” she said. “But we would be ill-advised not to implement this quick measure because this clearly helps to reduce emissions and therefore improves air quality.”
