German authorities are turning their attention to supplier Bosch to determine its role in the Volkswagen diesel cheating scandal.
Prosecutors in Stuttgart are investigating the company to see if staff helped Volkswagen configure the "defeat device" software that allowed diesel cars to cheat on emissions tests.
Bosch reportedly supplied some of the components in the affected cars, including control software.
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The Bosch probe will focus on "corporate staff," although no individual suspects have been identified, reports Bloomberg.
Bosch reportedly warned Volkswagen in 2007 that the way it planned to use software being installed with diesel engines was illegal.
This was reported on September 27--shortly after the announcement of VW's cheating by the U.S. Environmental Protection Agency (EPA)--by the German tabloid Bild-Zeitung, but the source of the information was never identified.
2015 Volkswagen Passat TDI
At the time, Bosch said it supplied two components for exhaust treatment that are "standard" in many cars, and that Volkswagen was responsible for how the parts were used.
In its own internal investigation, Volkswagen determined that a handful of its own employees were responsible for the "defeat device" software--implying that management was largely unaware of the cheating.
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That conclusion was based on the testimony of 450 people, including at least 50 Volkswagen employees.
The "defeat device" software could detect the conditions of a laboratory emissions test, and lower emissions levels to within legal limits.
But in real-world driving, these limits were ignored. Some VW models equipped with the EA189 2.0-liter four-cylinder engine were found to emit 35 times the legally-allowed amounts of nitrogen oxides.
2015 Volkswagen Golf TDI
Further investigations also revealed that the software was used in a separate, 3.0-liter V-6 powertrain. Audi CEO Rupert Stadler recently said these engines may only require simple software changes.
New EU investigation
Volkswagen previously touted these powertrains' efficiency and environmental benefits, and now the fallout from those claims has triggered still another investigation.
Late Tuesday, German media reported that the European Commission's Anti-Fraud Office (OLAF) is investigating VW on suspicion that it had misused funds from low-interest EU loans granted for R&D into cleaner and lower-emission engines.
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The European Investment Bank, based in Luxembourg, said it had lent VW's European group 4.5 billion euros ($5 billion) since 1990, along with 500 million euros for work outside the EU. Roughly 1.9 million euros remains to be repaid.
OLAF is investigating how those funds were used, given the existence of the "defeat device" software.
Volkswagen says it has a fix for the 2.0-liter engines that will satisfy European regulators, and plans to begin recalling cars in January.
2015 Volkswagen Golf TDI SE
However, the proposed fix submitted to EPA and California Air Resources Board officials has not been approved--and VW won't say exactly what it is.
Consequently, no timeline for the recall of the 482,000 EA189-equipped cars in the U.S. is being discussed.