German Carmaker Volkswagen shares plunged by nearly 20 percent on Monday after the company
admitted that it had rigged emissions tests of diesel-powered
vehicles in the United States, and U.S. authorities said they would
widen the probe to other automakers.
The U.S. Environmental Protection Agency (EPA) said on Friday that Volkswagen, the world's biggest carmaker by sales, used software that deceived regulators measuring toxic emissions and could face penalties of up to $18 billion.
Evidence of increased toxic emissions at VW first emerged in 2014, prompting the California Air Resources Board to start investigating VW, a letter from the board to VW dated Sept. 18 showed.
Volkswagen initially denied it was trying to game the inspections, attributing the higher emissions readings to "various technical issues and unexpected in-use conditions,” the EPA said on Friday.
The stonewalling continued until the agency threatened to withhold certification for the carmaker’s 2016 models, the EPA said.
“Only then did VW admit it had designed and installed a defeat device” that purposely lowered emissions while a vehicle was being inspected, the agency said
The scandal reverberated on Monday with the White House saying it was "quite concerned" about the reports of VW's conduct. The U.S. Department of Justice started a criminal probe of the effort to game the emissions tests
The EPA and California officials said they would test diesel vehicles from other manufacturers for similar violations. In addition to Volkswagen, automakers including General Motors Co and Fiat Chrysler Automobiles sell diesel cars and SUVs in the United States.
Shares of VW, whose vehicles range from budget Seats and Skodas to luxury Bentleys and Lamborghinis, fell 18.6 % to close at 132.20 euros, wiping some 14 billion euros ($15.6 billion) off its market cap.
The U.S. Environmental Protection Agency (EPA) said on Friday that Volkswagen, the world's biggest carmaker by sales, used software that deceived regulators measuring toxic emissions and could face penalties of up to $18 billion.
Evidence of increased toxic emissions at VW first emerged in 2014, prompting the California Air Resources Board to start investigating VW, a letter from the board to VW dated Sept. 18 showed.
Volkswagen initially denied it was trying to game the inspections, attributing the higher emissions readings to "various technical issues and unexpected in-use conditions,” the EPA said on Friday.
The stonewalling continued until the agency threatened to withhold certification for the carmaker’s 2016 models, the EPA said.
“Only then did VW admit it had designed and installed a defeat device” that purposely lowered emissions while a vehicle was being inspected, the agency said
The scandal reverberated on Monday with the White House saying it was "quite concerned" about the reports of VW's conduct. The U.S. Department of Justice started a criminal probe of the effort to game the emissions tests
The EPA and California officials said they would test diesel vehicles from other manufacturers for similar violations. In addition to Volkswagen, automakers including General Motors Co and Fiat Chrysler Automobiles sell diesel cars and SUVs in the United States.
Shares of VW, whose vehicles range from budget Seats and Skodas to luxury Bentleys and Lamborghinis, fell 18.6 % to close at 132.20 euros, wiping some 14 billion euros ($15.6 billion) off its market cap.
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