EPA: Volkswagen cheated a second time on pollution tests

WASHINGTON -- Volkswagen cheated a second time on emissions tests, programming about 10,000 cars with larger diesel engines to emit fewer pollutants during tests than in real-world driving, according to the U.S. government.

The German automaker installed software designed to defeat the tests on VW, Porsche and Audi vehicles with six-cylinder diesel engines, the Environmental Protection Agency and California Air Resources Board said Monday. While on the road, the cars emit up to nine times more nitrogen oxide pollution than allowed by EPA standards, the agency said.

The latest charges follow VW's admission in September it rigged emissions tests for four-cylinder diesel engines on 11 million cars worldwide, including almost 500,000 in the U.S. The so-called defeat device in the six-cylinder engines was discovered by EPA and CARB with tests put in place in late September.

In a notice of violation sent to VW, EPA officials said the automaker "knew or should have known" by employing the software, the cars were not in compliance with Clean Air Act emission standards.

In a statement, Volkswagen said "no software was installed in the 3-Liter V6 diesel motors to change the emissions values in any impermissible way." It pledged to "fully cooperate with the EPA to clarify this situation."

VW officials, including U.S. CEO Michael Horn in congressional testimony, have claimed only a small number of software developers in Germany were responsible for the computer code that enabled the cars to trick U.S. government emissions tests.

On Monday, analysts said the latest charges call those claims into question.

"Volkswagen would do well to immediately and completely disclose all people and products involved in this deception, no matter how far-reaching," said Karl Brauer, a senior analyst for Kelley Blue Book.

Monday's announcement makes the notion only a limited number of people were involved in the deception appear "even more outrageous," Brauer said.

Members of Congress reacted sharply. The House Energy and Commerce Committee said an investigation of VW will continue.

"The latest revelations raise the question, where does VW's road of deceit end?" said a joint statement by committee chairman Fred Upton of Michigan and senior Democrat Frank Pallone of New Jersey, along with oversight and investigations subcommittee chairman Tim Murphy of Pennsylvania and senior Democrat Diana DeGette of Colorado.

"It's time for Volkswagen to fully come clean," the statement said.

The new charges also suggest even more financial pain for VW. The company faces fines of up to $37,500 per vehicle, which means up to $375 million could be added to penalties already projected in the billions of dollars. The company has set aside about 6.7 billion euros ($7.38 billion) to pay for recalling and fixing the affected cars. VW officials have also hinted at possible compensation to owners.

The EPA said Monday that the software on the six-cylinder diesels has a timer that turns on pollution controls when testing begins, including fuel injection timing and pressure, and changes the exhaust gas recirculation rate. All cause the cars to emit less nitrogen oxide pollution by operating at high exhaust temperatures, the agency said in the notice. One second after the first phase of the test ends, the cars return to normal operation.

The violations cover models including the 2014 Touareg, 2015 Porsche Cayenne and the 2016 Audi A6 Quattro, A7 Quattro, A8 and Q5. As with the smaller engines, the EPA says the cars are safe to drive.

With the scandal spreading to include some of the best-sellers from Audi, VW's most profitable brand, as well as Porsche, VW could face greater pressure on sales.

Michelle Krebs, a senior analyst for Autotrader, said the latest revelations were particularly bad for Audi, "which has been on a roll in terms of sales, reputation and image of late," but "now is being drawn deeper into the quagmire."

Previously, only the low-volume A3 Audi model was under scrutiny.

U.S. Audi sales rose 16 percent in September, while Porsche sales gained 23 percent. By contrast, Volkswagen brand sales ended the month flat after news of the emission-rigging broke in mid-month.

About 25 percent of VW brand sales have diesel engines, so the scandal almost certainly will cut into the brand's October sales. Dealers have few new diesels to sell because VW has quarantined the four-cylinder 2016 models at ports until their emissions status is resolved.

All major automakers report October sales Tuesday.

EPA officials said they tested VW and other vehicles for the presence of cheating software, and VW is the only one found with a violation. Officials wouldn't say which other vehicles they tested.

The agency has the authority to order recalls of the VW vehicles, but has yet to do so. VW has said it is working on a fix for the four-cylinder models, which the EPA says can pollute up to 40 times more than emissions limits.

"We need to be sure that the fixes are appropriate and acceptable," EPA Administrator Janet McCabe said.

Last month, the EPA said it was investigating different software on 2016 VW models that have yet to be certified by the EPA to go on sale in the U.S. But officials on Monday wouldn't comment about that investigation, saying that testing is still under way.