Here is the article that I provided the link to the facebook post. Apparently the poster has given his permission to share:

Eve asked me to put a post together to explain the VW situation and cut through all the ill informed mainstream media. So, here goes...

What VW have done is this; their diesel engine ECUs include some coding known in the industry as a "cycle beater". Cycle beaters recognise when a car is undergoing an emissions test. They can do this because the drive cycles (consisting of set speeds and acc/decelerations for certain durations) utilised for emissions testing are very prescriptive and consequently, recognisable. The drive cycle in the US is defined by the EPA and in Europe by the EC, known as the New European Drive Cycle (NEDC), although it's actually some 40 years old now! Both cycles are different and consequently pretty hard to compare, although they do both follow the same prescriptive philosophy. When the ECU/cycle beater recognises an emissions test is occurring the engine then employs a mode that improves emissions test results and there are several ways of doing this. This is on the assumption that one cycle beater can recognise either of the two drive cycles.

Cycle beaters are not illegal in Europe, all the OEMs use every trick they can to get the best result possible. Why wouldn't they when the loopholes are there and they're operating in such a competitive market!? Cycle beaters are only one such trick and many, if not all, of the OEMs are at it and not just for emissions testing. However, much like tax avoidance, it is up to the legislators to close these loopholes, rather than publicly condone an OEM for not sticking within the spirit of the regulations. They have not broken the law after all. However, in the US things are different...

When certifying a car for sale in the EU an OEM is only obliged to present a production specification vehicle for approval that must then pass the test there and then, as presented. These tests are witnessed by an authority, often a government department, to ensure the test is conducted correctly. Even for retests during production runs, conducted on randomly selected cars, (known as Conformity of Production), the car must only pass the test there and then, as presented. Therefore, the production vehicles have cycle beaters built in to their ECUs so they are representative of production specification cars. Again, none of this is illegal in the EU.

This is where VW have fallen down though. In the US, approval tests are self certified and generally unwitnessed, although I'm told emissions are the exception and the EPA do witness these tests. The OEM presents a test report as evidence that they comply with the regulation and in doing so are stating they are compliant AT ALL TIMES, not just in the test laboratory. This is where the US and EU approval processes differ the most.

Understandably, VW have pursued global build standards for their vehicles to save cost and complexity, whereby the same specification of car can be sold in the EU or US. However, in doing so they have failed to remove the cycle beaters that are legal in the EU and contravened the US regulations. Whether this has happened because of arrogance in taking a (mis)calculated risk or a lack of respect for the US regulations, we cannot say for definite. All we do know is that VW got caught and the US legal system is such that woe betide anyone who does not comply with their regulations, they'll be hit by punitive fines that could kill them off for good. VW stole a march on everyone else with diesel sales into the US (Audi's ALMS R10 TDI programme played it's part in this) and a conspiracy theorist might like to suggest that a thorn in GM and Ford's side has now been dealt with...but of course there is zero evidence for this.

So that's what happened to VW and the consequences for them and OEMs importing into the US as a whole could be huge. Based on the numbers that have been mentioned, I would say VW's marketing budget, including motorsport activities, could be at risk from the amount they'll have to pay out in legal fees and fines over the coming months.

Emissions were already a political hot potato and things could be about to get hotter... For example, the EC will likely be asking questions of KBA, the German approval authority, for potentially knowingly approving vehicles that do not comply with the spirit of the law. How much of a legal case, the EC and anyone else in the EU will have, as the law has not actually been broken, remains to be seen. One for the lawyers to fight out...
Also, the UK is currently being fined by the EC for below par air quality. You'd think the Environment Agency will now be arguing that this poor air quality is not their fault but the fault of VWs and perhaps other cars, not necessarily having fully EU compliant exhaust emissions...despite the approvals being in place from KBA. How this all pans out will be fascinating and the consequences could be huge. It is worth pointing out that the public have nothing to worry about, this should not cost them any money or inconvenience. A recall to recalibrate ECUs and remove cycle beaters is possible though I suppose, pointless as that would be. It could be a lucrative time for emissions test organisations too.

I would imagine engine calibration departments across European OEMs importing into the US are busy and uncomfortable places to work at the moment.

I hope that sheds some light and understanding into what's happened and what the implications could be going forward. As always, don't believe everything you read in the mainstream media.

Personally, I feel sorry for VW and fear for their and my beloved Audi's future but it seems they could've brought it on themselves, time will tell...