Breathe a tentative sigh of relief, auto investors: It's possible that the cheating on emissions tests might not have been an industrywide thing after all.
The head of Ford's (NYSE:F) operations in Germany -- where it sells many diesel-powered cars -- said emphatically on Thursday that the Blue Oval was "not involved in any manipulation" of emissions tests.
Stocks of most automakers have been very volatile since the U.S. Environmental Protection Agency charged Volkswagen (NASDAQOTH:VLKAY) on Sept. 18 with rigging its diesel-powered cars to cheat on tests that measure pollutants emitted in exhaust.
VW's shares lost a third of their value in the days that followed the allegations, and its CEO was forced to resign. Investors have worried that other automakers might be found to have cheated on testing intended to enforce increasingly tough environmental regulations around the world.
But so far at least, it looks like VW was an outlier -- and many of its peers are expressing their displeasure with its actions.
So far, there's no evidence against any automaker other than VW
Volkswagen is accused of selling 11 million vehicles equipped with software that cheated on emissions tests. The software turned on parts of the engine's emission-control hardware only when it detected that a test was under way. In normal driving, the cars' exhaust was much dirtier than allowed.
VW has essentially admitted to the EPA's allegations, and it has promised to repair the 11 million vehicles affected so that they comply with pollution rules. VW has set aside $7.3 billion to cover the costs of the scandal, but many analysts think the ultimate costs to the company will likely be higher.
The allegations against VW led many observers to ask: Were all of the automakers cheating on these tests? It's an open secret that many countries allow automakers to conduct emissions tests under optimized -- even unrealistic -- conditions. But out-and-out cheating like Volkswagen's appears not to have been happening.
Several other automakers, including both of VW's German rivals, have emphatically insisted that their cars comply with environmental regulations, without any cheating. So far, governments seem to agree: A spokesman for Germany's transport ministry said on Friday that it has no evidence that any automakers other than Volkswagen manipulated emissions tests.
If other automakers have been cheating, it's likely to be uncovered before long. The EPA is expanding its investigation to examine more than two dozen diesel-powered vehicles from other automakers for signs of cheating, the Financial Times reported. German regulators are expected to conduct similar tests on other diesel-powered vehicles sold in Europe.
But at least as of right now, there's no evidence against any automaker other than Volkswagen. And more and more of those automakers are coming out with statements condemning their giant German rival.
VW's rivals insist they weren't cheating, worry about consumer trust
Ford Germany chief Bernhard Mattes wasn't the only auto executive to push back on suggestions that cheating might be rampant in the auto industry. BMW has insisted repeatedly that its diesels comply with pollution laws under any driving conditions.
BMW product-development chief Klaus Froehlich said again on Thursday that a system of "continuous checks" would block any attempt to put such a system into production at BMW. "Manipulation does not happen with us. I can flatly rule that out," he said in remarks reported by Reuters.
Toyota doesn't sell diesels in the U.S., but the CEO of Toyota's North America operations, Jim Lentz, said that he is confident that the company's diesel-powered vehicles sold elsewhere don't have devices that defeat emissions controls. Lentz expressed concerns that consumers would "lose trust in the industry" in the wake of the VW scandal, the Detroit News reported.
Those concerns were echoed by Honda's chairman, Fumihiko Ike. "This one company's deeds have damaged trust in the auto industry," Ike said, according to a Bloomberg report. He said that his remarks reflected his personal views, not those of Honda -- but it was a significant statement.
Pressure is growing as VW scrambles to come up with a fix for the cars
VW will continue to face immense pressure in the coming week. It is scrambling to comply with a German government demand that it announce a recall plan within the next few days. New investigations are under way in France, Italy, Switzerland -- and California, which has strict state environmental laws.
It's unclear whether VW will ultimately have to face criminal charges. But it will get a taste of government wrath this week: VW U.S. chief Michael Horn is set to testify before Congress on Thursday.
John Rosevear owns shares of Ford. The Motley Fool recommends Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
What Happened in the Stock Market Today
Stocks had a huge day, sending the major indexes to new records. Shares of Juno Therapeutics soared following a buyout report, and Ford slumped on disappointing guidance.
Why Shares of Ford Motor Company Fell 7% Today
Ford's 2018 guidance didn't sit well with investors.
Ford's Behind-the-Scenes Focus on Data
Ford’s recent partnerships and small-scale tests could bode well for the future.