[bri3d]

Yes? These things directly follow one another: VW are obsessed with letter-of-the-law compliance, so things like end-runs around test routines are obvious solutions.

And VW didn't single-handedly destroy the diesel market; economics and physics did. Almost every other manufacturer was also fudging the tests results in some way. But more importantly, building a passenger car diesel that meets NOx targets doesn't work; by the time a passenger car diesel meets modern NOx targets honestly, the car contains a ludicrous precious metal loading in the catalyst and is only a few percentage points more efficient in terms of consumption and CO2 emissions than a petrol car and the math doesn't add up. Diesel is just not a practical solution for passenger cars; it never was in most ways, but it took the EU a long time to restrict NOx pollution to a sustainable level and expose the physical issues at hand.

[dreamcompiler]

You can have high-mileage diesel cars or low-emissions diesel cars but not both at the same time.

VW knew this but lied to customers and told them they could have both. Dieselgate was their attempt to convince everybody the lie was true.

[Hnedelin]

This was official EU policy, based on french reports, as the french and italian manufacturers actually came up with common rail diesels first. The EU then changed regulations to tax based on CO2, which diesels are better at. They also made diesel taxes lower, to offset the higher prices for diesel cars (often 2000+ euros more than the petrol versions). This was all done in the framework of reducing foreign oil imports.

What VW did was to save money from ThinkBlue systems. Not every manufacturer failed the tests, especially the ones who used exhaust gas treatment did pass, and were more economical than petrol engines. After that, the EU changed emission standards and made them more strict, so VW switched to using dual exhaust treatment. Which made the cars more expensive.

What finally killed diesels was the removal of the tax reduction on diesel fuel. Since it is now taxed the same as petrol, there is no more any advantage that can offset the higher purchasing costs of the cars.