VW shares plunge after German car maker admits rigging emissions tests

Shares in German car maker Volkswagen have plunged by a fifth after it admitted rigging US emissions tests for nearly 500,000 diesel cars and was ordered to recall the vehicles to be fixed.

Chief executive Marin Winterkorn said he was “deeply sorry” after findings by America’s Environmental Protection Agency (EPA) that it had cheated clean-air rules. It faces fines that could total billions of dollars.

The EPA said VW used software that allowed its diesel cars to release fewer smog-causing pollutants during tests than in real-world driving conditions.

Its findings cover 482,000 cars built in the last seven years including the Audi A3, VW Jetta, Beetle, Golf and Passat models.

The EPA said cars had been fitted with sophisticated software algorithms which detect when they are undergoing officials emissions testing, and turns full emissions controls on only reducing the test. It is a type of software known as a “defeat device”.

Once on the road, the cars produced nitrogen oxide pollutants at up to 40 times the legal standard.

Cynthia Giles, assistant administrator for the Office of Enforcement and Compliance Assurance, said: “Using a defeat device in cars to evade clean air standards is illegal and a threat to public health.” VW has ordered an internal review.