Volkswagen has admitted fitting up to 11 million diesel cars worldwide with software that cheated emissions standards and, separately, has acknowledged that another 800,000 vehicles had higher carbon emissions than it had previously reported.
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The German carmaker is cutting spending by a billion euros ($1.07 billion) in the coming year, CEO Matthias Mueller announced Friday.
The carmaker will trim spending on factories and equipment to 12 billion euros ($12.8 billion) next year, down from 12.9 billion euros under its previous budget.
The United States agency said in a statement that in a meeting yesterday, “VW and Audi officials told EPA that the issues EPA identified in the November 2nd NOV (notice of violation) extend to all 3.0 litre diesel engines from model years 2009 through 2016”.
Friday’s investment plan was only for 2016, rather than the five years Volkswagen has provided in the past.
Reuters noted that Bosch provides the engine control module, called EDC17, and basic software for almost all the four-cylinder diesel cars sold in North America, including by VW, BMW and Daimler.
Volkswagen was also expected to discuss initial plans for recalling vehicles in meetings Thursday and Friday with US and California regulators, according to the Wall Street Journal. “We will strictly prioritize all planned investments… anything that is not absolutely necessary will be cancelled or postponed”.
Amid fears the emissions scandal could hit sales of diesel vehicles, Mueller said VW would increase spending on alternative technologies such as electric and hybrid vehicles by 100 million euros next year compared with previous targets. It said earlier this month it had also overstated fuel consumption in some vehicles.
The construction of a planned new design center in Wolfsburg is being put on hold and the construction of a paint shop in Mexico will be reviewed.
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The emissions scandal has seen the VW Group’s share price plunge, falling by more than a third as and wiping more than €25bn off the company’s market value. Arndt Ellinghorst, a London-based analyst at Evercore, said of the 8 percent cut: “It’s still a huge amount of investment”.
