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Cheating the Code on The Internet of Things…

The Internet of Things will streamline our world, save us time, improve our health, slow climate change. It makes our cars smart, our media social and our electronics networked. Life is super-connected in the 21st century—what could go wrong? Malicious hacking, that’s a big one; we all worry about the hackers getting our data. And this week, the biggest car company in the world showed us another one: cheating the code.

Engineers at Volkswagen put a cheat in the code that runs their automobiles and exposed the dangers that come with the explosive growth of code-operated devices in a world that is slow to develop the regulatory capability to protect users.

Volkswagen’s so-called “defeat device” was revealed by the International Council on Clean Transportation (a GSN with the mission to “improve the environmental performance and energy efficiency of land, marine and air transportation, in order to benefit public health and mitigate climate change”) in testing results that showed a nearly 40% gap between stated mileage and emission rates, and actual driving performance. That’s when the EPA stepped in. Still, it took some time—almost two years—to dig through the complex code that runs an automobile and find the cheat.

It turns out VW was selling fuel-efficient, sporty, “clean diesel” cars—except that last bit, the clean diesel bit, was a lie. Not just a little fib, a big, fat lie. Whoever wrote the code to slip the lie past the inspectors did it with intent and possibly with the knowledge of the top managers. As more and more of our “things” are part of the Internet of Things, we are less and less equipped to catch the cheaters, or recognize malicious motives. Even when the cheating is quantified, it can take time—in this case two years from the time it was reported and six model years of automobiles—for the information to get far enough out into the mainstream for action to be taken to correct it.

As of one year ago, the results of testing performed by the ICCT showed that the CO2 emissions from this class of cars were about seven times—38%—higher than the limits set by the Euro 6 standard. The group had been evaluating the correlation of promised fuel efficiency and emission rates with actual results for almost a decade and noted that the gap between the promise and the performance had been increasing over time.

Most drivers accept that “mileage may vary,” but car owners have no way of assessing the emission rates of their automobiles—that falls to regulators, who rely on computer-assisted measurements. Regulators do their testing in controlled and predictable environments, environments that the writers of code can make their “things” recognize and respond to in specific ways. In the case of the VW engines, emission could be adjusted when the car recognized that it was in a testing environment and the test operator wouldn’t see the effect that the adjustment had on mileage and performance. On the open road the software would adjust to provide performance and mileage but with dramatically increased emissions. Without the open-road testing of the watchdog GSN, ICCT, the difference might never have been noticed.

And the dominoes are just beginning to fall around this chicanery. It’s easy to imagine how it started. Engineers were directed to come up with a marketable car that would serve consumers their cake and let them eat it too—a “clean diesel” car with pep and performance and great gas mileage. Just a little code and there’s a car that roars around like a lion on the highway and curls up like a kitten in the testing lab. What’s the problem?

It depends on which part of the elephant you’re grabbing onto. For the engineers that designed the car it’s certain that they were under pressure to create a product that met emission standards and also had performance features the market wanted. For the driver, the desire to drive a fuel efficient and “clean” car is important, and if that can come in a package that also offers performance then a somewhat higher cost is easy to justify. As the chickens come home to roost the largest car company in the world is on the ropes.

Let’s see. There’s the $51 million in tax credits that California paid to nearly 40,000 Jetta buyers. “It is really unfortunate,” said Luke Tonachel, of the Natural Resources Defense Council to the LA Times. “The government has been effective to help advance technologies, but it is a waste of taxpayer dollars when they aren’t actually helping to clean the environment.”

While Volkswagen may weather this storm, it has already taken an epic hit with a 30% drop in its stock price, a hit that will come out of the pockets of its stockholders.

VW’s CEO has resigned, the US Justice Department has launched a criminal inquiry and there is some muttering in the media about jail time. Lawsuits are just getting going and penalties are just starting to be tallied. The latest number in the news is $18 billion, with a “B,” or 20% of the annual revenue for VW cars. That’s just in the US. Canada and countries in Europe and Asia are also investigating the situation. 11 million cars worldwide may be part of a recall to refit the bad code.

Car owners now have cars requiring modification and, while they may enjoy somewhat improved gas mileage after the repair, their driving experience will not be what they were used to. The value of their cars won’t be what they expected in the resale market either. Speaking of that, the dealers with cars on their lots will have more trouble selling them now as the image of VW dulls, and their service operations will be backed up with the parade of cars coming in for the refit. Some of the nearly 600,000 jobs at VW and others in the automotive industry may be on the line if the impact is big enough.

The clean-diesel cheating has another victim: the environment and the movement to battle climate change. We need clean energy. Industrial leaders should produce and market products that help reach that goal, but they can’t if they remain mired in the old paradigms of performance and convenience. We’re living in a time that calls for tough medicine and, with a few lines of code, the largest car company in the world sold us snake oil.

Jill Rundle, Executive Editor, Global Solution Networks