VW diesel cars emissions scandal: What you need to know

A VW Golf is pictured inside the so-called cat towers of car manufacturer Volkswagen AG (VW). (AFP / Tobias Schwarz)

German automaker Volkswagen AG admits that it rigged U.S. emissions tests so it would appear that its diesel-powered cars were emitting fewer nitrogen oxides, which can contribute to ozone buildup and respiratory illness.

The crisis widened on Tuesday as the company made the stunning admission that 11 million of its diesel vehicles worldwide were fitted with same cheating software.

Here are some questions and answers about the ongoing crisis.

Q. Which vehicles does this affect?

A. Vehicles worldwide with Type EA 189 diesel engines. In the U.S., VW installed software in roughly 482,000 diesel passenger cars sold in the U.S. since 2008, according to the Environmental Protection Agency. The software turned on the cars' full emissions control systems when the cars were being tested by the government, and then turned off those systems during normal driving. The Jetta, Beetle, Audi A3 and Golf from the 2009-2015 model years, as well as the Passat from the 2014-2015 model years. All have with 2-Liter, four-cylinder diesel engines. Volkswagen has halted the sale of 2015 models and is prohibited from selling 2016 models until they are fixed.

Q. What does Volkswagen say?

A. Volkswagen Group CEO Martin Winterkorn issued a statement Sunday saying that the company will fully cooperate with government investigations and has ordered an internal probe. Winterkorn said, "I personally am deeply sorry that we have broken the trust of our customers and the public." The company said Tuesday it would set aside around 6.5 billion euros (US$7.3 billion) to cover the cost from the scandal.

Q. Why would Volkswagen cheat on emissions tests?

A. Experts think VW may have wanted to avoid the cost of additional hardware to meet tough U.S. emissions standards, so it came up with a cheaper software fix. The software also would have helped the cars' fuel economy numbers, since they get better gas mileage when the emissions control system is turned off.

Q. What should customers do?

A. Volkswagen will fix the cars for free as soon as it develops a remedy. Owners will be notified when there's a fix. In the meantime, the cars are safe to drive. Car buying site Edmunds.com cautions owners against selling the cars right now if they don't have to, since they can expect a lower trade-in value.

Q. Does this affect other diesel vehicles in the U.S.?

A. Not so far. Thirteen brands currently offer diesels in the U.S., including Ram, Chevrolet, Mercedes-Benz and BMW. West Virginia University, which conducted the tests that led to the discovery of Volkswagen's software, said the BMW it tested passed.

Q. What's next?

A. The U.S. government could fine Volkswagen $37,500 per vehicle for the violations, a total of more than $18 billion. The U.S. Justice Department, the California Air Resources Board and German authorities are also investigating. Winterkorn could also face scrutiny from Volkswagen's board, which will meet as early as Wednesday. Investors have spoken. During the past two days, VW stock price has fallen more than 35 per cent.