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VW says it will cut investments to prepare for emissions fixes

Volkswagen has denied that the software allows the cars to cheat on emissions tests.

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Volkswagen and Audi officials told the EPA that all 3.0-liter TDI diesel engines sold in the USA between 2009 and 2016 were fitted with emissions-cheating “defeat devices”, the agency said Friday.

The regulators said they will continue to investigate and take “all appropriate action”.

On Friday, bigwig German automaker Volkswagen (VW) – which is now dealing with diesel emissions-cheating scandal – submitted its vehicle recall plan with the California Air Resources Board (CARB) and its federal counterparts.

In September, Volkswagen admitted that about 482,000 USA cars with 2-Liter diesel engines from the 2009 through 2015 model years have software that turns pollution controls on during government treadmill tests and shuts them off when on real roads.

“We urge you to offer drivers the fair market value for these vehicles that was in place before VW’s illegal activity was made publicly known”, the lawmakers wrote. The EPA said in a statement Friday night that VW had turned in its proposed fix, but the agency wouldn’t give details.

New Chairman Hans Dieter Poetsch has also put workers on notice of cutbacks by saying the emissions scandal poses an existential threat to VW.

CARB Chairman Mary Nichols told a German newspaper the agency expects that vehicles with the first generation of VW’s 2.0-liter diesel engine will require a hardware “retrofit” to bring their emissions into compliance. Diesel cas are usually known for their pollutant problems, finding a new way to make diesel cars fun and safe to drive was most likely Volkswagen’s goal.

Spending on alternative technologies is to be increased by an extra 100 million euros next year amid fears over sales of diesel vehicles. VW will also delay construction of an R&D center in Wolfsburg. It said earlier this month it had also overstated fuel consumption in a few vehicles.

The vehicles affected by the inconsistencies in carbon dioxide emissions include the diesel variants of Volkswagen’s Polo, Golf and Passat models, as well as the subcompact A1 and the A3 hatchbacks of the Audi premium brand, Skoda Octavia, Seat Ibiza and Seat Leon.

Cuts will mean that plans for a new design centre in the company’s Wolfsburg base are on hold, saving about €100m, and building a new paint shop in Mexico will be reviewed.

The USA prosecutors have not found so far evidence of Bosch’s direct involvement, sources said.

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EPA can levy fines of up to $37,500 per vehicle for Clean Air Act violations, meaning Volkswagen could face more than $21 billion in fines if the company is proven to have installed defeat devices on the latest round of models in addition to the previous offenders.

Volkswagen cutting investments, to present US engine fixes