No, the scandal that is being discussed is the fact that VAG have been caught fiddling. Clearly if the vehicles pass the emissions tests with the systems working then they obviously work; the issue is keeping them working all the time.
I think you have misinterpreted the facts to a certain degree. What VW have done is not a faulty software. Quite on the contrary, it is actually a software that is very well implemented, and is specifically crafted to deceive certification authorities, lowering the engine emissions when it detects it is being under a test. However, the report states that in all other conditions, i.e. when the software is running as prescribed, it emits up to 40 times more than the acceptable limit!
This isn't done without a reason. If the engine was OK running in "low emission mode", they would have kept it. I believe the performance of the engine is severely hampered, probably the max power and torque are sacrificed and who knows what else, all that in order for the engine to pass a test. And they certainly don't want the engine to be like that all the time.
So, as I said, there are few explanations:
- VW can't manufacture a high-tech diesel engine. Doubtful.
- VW would like to generate more profits by saving on DPF, urea, etc. Very improbable, having in mind their global volume of worldwide sales.
- VW know diesel engines are dirty but it's a global trend, marketed by the supposedly better fuel economy and better torque characteristics, and mostly because diesel engines happen to have lower CO2 emissions which, in combination with some near-sighted taxation systems based on the CO2 such as the one in UK for example, make diesel engines more desirable. That's the most plausible theory in my opinion.