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California Just Rejected VW’s Plan to Fix Its 2-Liter Engines

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California has the highest level of ozone and ambient particulate matter pollution in the U.S. Some 12 million Californians live in communities that exceed federal pollution standards.Photograph by Mark Ralston — AFP/Getty Images

Matthias Müller’s trip to the U.S. just went from bad to worse. The California Air Resources Board late Tuesday said it had rejected Volkswagen’s proposed fix for bringing its 2-liter diesel engines into line with emission limits.

The move increases the likelihood that VW will have to buy back hundreds of thousands of vehicles that breach U.S. limits on emissions, substantially raising the cost of rescuing its reputation in the U.S.. It also augurs badly for Müller’s scheduled meeting with Environmental Protection Agency head Gina McCarthy in Washington, D.C., later Wednesday.

The Volkswagen AG (VLKAY) CEO had made a mess of his first official appearance on U.S. soil on Sunday by telling NPR that VW “didn’t lie” to regulators about the emissions performance of its diesel engines, and saying that its failings were technical, rather than ethical. He subsequently backtracked on those claims in a hastily-arranged second interview with NPR.

It’s unlikely that Müller’s slip prompted the CARB’s decision on Tuesday to reject its plans, but it may have had some bearing on the language in the CARB’s communications to the German company, which was raw and verging on contemptuous, a reflection of how strained relations between the two have become.

The CARB said it was rejecting the proposed repairs because they “lack enough information for a technical evaluation,” and “do not adequately address overall impacts on vehicle performance, emissions and safety.”

“Volkswagen made a decision to cheat on emissions tests and then tried to cover it up,” said CARB Chair Mary D. Nichols. “They continued and compounded the lie and when they were caught they tried to deny it.”

In a separate letter to top executives at Volkswagen of America, CARB’s head of emissions compliance and automotive regulations Annette Herbert said that VW’s proposals were “incomplete, substantially deficient and fall far short of meeting the legal requirements to return these vehicles to the claimed certified configuration.”

The CARB is due to rule on VW’s plans to fix another 85,000 VW, Audi and Porsche cars running 3-liter engines on Feb. 2.