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Volkswagen says emissions scandal affects 11 million vehicles worldwide

Company sets aside $7.3 billion to cover costs, as scandal widens beyond the US

The Volkswagen Group today announced that software "irregularities" in some of its diesel engines affect 11 million vehicles worldwide, as regulators in the US and other countries investigate allegations that the company used the software to cheat on emissions testing. In a statement released Tuesday, the German manufacturer said it would set aside 6.5 billion ($7.3 billion) to cover costs associated with the issue, which allowed some models to skirt emissions regulations in the US.

The Environmental Protection Agency (EPA) announced the discovery of the software last week, saying that the so-called "defeat device" activated emissions controls only during laboratory testing of diesel-powered Volkswagen cars, and not during normal operation. "This results in cars that meet emissions standards in the laboratory or testing situation, but during normal operation, emit nitrogen oxides, or NOx, at up to 40 times the standard," the agency said in a statement.

The scandal widens

Today's announcement signals that the scandal extends beyond the US, impacting far more cars than previously acknowledged. Last week, the EPA said the manipulation affected 482,000 cars in the US, including the 2009 to 2015 models of the Jetta, Beetle, Golf, and Audi A3, as well as the 2014 and 2015 Passat. The agency has accused the company of violating the Clean Air Act, which could carry a penalty of $18 billion. Bloomberg reports that the US Justice Department is opening a probe into the case, citing two officials close to the matter.

Martin Winterkorn, chairman of the board for Volkswagen, issued an apology on Monday, saying the company had "broken the trust of our customers and the public." In its statement today, Volkswagen said the manipulation affects vehicles with Type EA189 engines, and that it is taking unspecified "technical measures" to resolve it.

Regulators in other countries have called for probes into Volkswagen's emissions practices. In an interview with the Bild newspaper this week, Germany's transportation minister said VW diesel cars in the country would undergo emissions testing following the EPA's revelations, while South Korea said it would examine whether the company's cars meet its pollution regulations. Volkswagen is also coming under scrutiny in Italy and France, where French Finance Minister Michel Sapin has called for a European investigation into all manufacturers.