BERLIN—Volkswagen AG’s smog-test troubles escalated Tuesday as the company acknowledged putting stealth software in millions of vehicles worldwide. The scandal has now cost VW more than 24 billion euros ($26 billion) in market value.
Volkswagen stunningly admitted that some 11 million of the German carmaker’s diesel vehicles contain software that evades emissions controls, far more than the 482,000 identified by the U.S. Environmental Protection Agency as violating the Clean Air Act.
Volkswagen also warned that future profits could be affected, and set aside an initial 6.5 billion euros ($7.3 billion) to cover the fallout.
CEO Martin Winterkorn apologized for the deception under his leadership and pledged a fast and thorough investigation, but gave no indication that he might resign.
“Millions of people across the world trust our brands, our cars, and our technologies,” Winterkorn said Tuesday, Sept. 22, in a video message. “I am endlessly sorry that we have disappointed this trust. I apologize in every way to our customers, to authorities and the whole public for the wrongdoing.”
“We are asking, I am asking for your trust on our way forward,” he said. “We will clear this up.”
VW has yet to explain who installed the software, under what direction, and why.
“I do not have the answers to all the questions at this point myself, but we are in the process of clearing up the background relentlessly,” Winterkorn said.
The damage to Volkswagen’s reputation was reflected in the market’s response. Volkswagen’s ordinary shares fell 20 percent Tuesday to close at 111.20 euros ($124.83). They’re down 31 percent since the crisis began.
The EPA said Friday that VW faces potential fines of $37,500 per vehicle, and that anyone found personally responsible is subject to $3,750 per violation.
After blaming unrelated issues for more than a year, the company finally told U.S. regulators on Sept. 3 that it installed software that switches engines to a cleaner mode during official emissions testing. The software then switches off again on the road, enabling cars to drive more powerfully while emitting as much as 40 times the legal pollution limit.
