Michael Horn admits carmaker was dishonest with US regulators as France calls for Europe-wide inquiry into emissions-fixing scandal 
 
 The US chief executive of Volkswagen has said the company has “totally screwed up” over the emissions scandal that has rocked the automotive industry. 
 
 
 
 Michael Horn admitted at an event in Brooklyn, New York, on Monday night that VW had been dishonest with regulators and the public. 
 
 VW scandal: what the emissions revelations mean Read more 
 
 The world’s second-biggest carmaker could face a fine of up to $18bn (£11.6bn), criminal charges for its executives, and legal action from customers and shareholders due to US claims it used a defeat device to falsify emissions data. The device recognises when the car is being tested and immediately cuts emissions to a level that is much lower than normal and unsustainable under usual driving conditions. 
 
 Shares in Volkswagen fell by another 5% on Tuesday after losing almost a fifth of their value on Monday. 
 
 
 
 In further developments, France’s finance minister called for a “Europe-wide” investigation into diesel cars to “reassure” the public. 
 
 Michel Sapin told French radio: “This is not a minor subject, it’s not about speed or the quality of leather. What we are dealing with is making sure people avoid being poisoned by pollution.” 
 
 South Korea said on Tuesday it would investigate emissions of the VW Jetta and Gold models plus Audi A3 cars produced in 2014 and 2015. If problems are found, South Korea’s environment ministry said its inquiry could be expanded to all German diesel imports, which have surged in popularity in recent years in a market long dominated by local producers such as Hyundai. 
 
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 The US Congress also confirmed it is investigating the scandal. The House energy and commerce committee chairman, Fred Upton, and the oversight and investigations subcommittee chairman, Tim Murphy, announced that the oversight and investigations subcommittee will hold a hearing. 
 
 In addition, the US Department of Justice could conduct a criminal investigation into Volkswagen. 
 
 Horn, speaking at an event to launch a new version of the Passat sedan, which featured rock star Lenny Kravitz, said: “Our company was dishonest with the EPA, and the California air resources board and with all of you, and in my German words: we have totally screwed up. 
 
 “We must fix the cars to prevent this from ever happening again and we have to make this right. This kind of behaviour is totally inconsistent with our qualities. 
 
 “We are committed to do what must be done and to begin to restore your trust. We will pay what we have to pay.” 
 
 The comments from Horn are the first in public by a senior VW executive since the scandal emerged, although the company apologised on Sunday. He left the event without taking questions. 
 
 One of the officials involved in uncovering the alleged behaviour has told the Guardian that the emissions-fixing scandal could extend to other companies and countries. 
 
 Billions of pounds have been wiped off the value of global carmakers amid growing concerns that emissions tests may have been rigged across the industry. 
 
 
 
 “We need to ask the question, is this happening in other countries and is this happening at other manufacturers? Some part of our reaction is not even understanding what has happened exactly,” said John German, one of the two co-leads on the US team of the International Council for Clean Transportation (ICCT), the European-based NGO that raised the alarm. 
 
 The US Environmental Protection Agency (EPA) said on Friday that VW had installed illegal software to cheat emission tests, allowing its diesel cars to produce up to 40 times more pollution than allowed. The US government ordered VW to recall 482,000 VW and Audi cars produced since 2009. 
 
 
 
 In response, Martin Winterkorn, chief executive of VW, said in a statement on Sunday he was “deeply sorry” for breaking the trust of the public and ordered an external investigation. 
 
 A British expert in low-emission vehicles claimed the manipulation of air pollution data could be widespread and that tests in Europe are “much more open to this sort of abuse”. 
 
 
 
 Greg Archer, a former government adviser and head of clean vehicles at the respected Transport & Environment thinktank, said: “I am not surprised. There has been a lot of anecdotal evidence about carmakers using these defeat devices. All credit to the EPA for investigating and finding the truth.” 
 
 Archer, the former managing director of the UK’s Low Carbon Vehicle Partnership and non-executive director for the government’s Renewable Fuels Agency, said the scandal could spread into petrol cars and CO2 levels. “It is probably not limited to diesel and not limited to emissions,” he added. 
 
 The devices are thought to work by injecting more urea – an exhaust fluid – into the car when it is being tested. This limits nitrogen oxide emissions to a fraction of their usual level. The car detects it is being tested because devices such as the anti-collision systems have to be turned off when it is in the laboratory. The extra urea is not injected into the car when it is on the road because it would quickly run out. 
 
 Archer claims European tests are more open to abuse because they are conducted before the car goes into mass production and by companies that have been paid by the carmakers. These testing companies have been verified by regulators in each country, such as the Vehicle Certification Agency, but in the US the tests are conducted by an independent body. 
 
 
 
 Industry leaders in Britain claimed there was no evidence that manufacturers are cheating the system in Europe but admitted it needs to be reformed. 
 
 Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, the industry trade body, said: “The EU operates a fundamentally different system to the US – with all European tests performed in strict conditions as required by EU law and witnessed by a government-appointed independent approval agency. There is no evidence that manufacturers cheat the cycle. 
 
 “The industry acknowledges, however, that the current test method is outdated and is seeking agreement from the European commission for a new emissions test that embraces new testing technologies and is more representative of on-road conditions.” 
 
 The US allegations involve a series of diesel cars produced by VW and the brands it owns, such as Audi. These include the Audi A3, VW Jetta, Beetle, Golf and Passat models. VW has halted sales of these models. ||||| Image copyright Getty Images 
 
 The boss of Volkswagen's US business has admitted the firm was dishonest in using software to rig emissions tests. 
 
 Michael Horn said the firm was dishonest with US regulators, adding: "We have totally screwed up." 
 
 Last Friday, the regulators said VW diesel cars had much higher emissions than tests had suggested. 
 
 French Finance Minister Michel Sapin has called for an EU inquiry, but a UK car industry spokesman said there was "no evidence" of cheating. 
 
 Mike Hawes, who is chief executive of the UK's Society of Motor Manufacturers and Traders, said the EU operated a "fundamentally different system" from the US, with tests performed in strict conditions and witnessed by a government-appointed independent approval agency. 
 
 "There is no evidence that manufacturers cheat the cycle," he said. "Vehicles are removed from the production line randomly and must be standard production models, certified by the relevant authority - the UK body being the Vehicle Certification Agency, which is responsible to the Department for Transport." 
 
 However, he also described current testing methods as "outdated" and said the car industry wanted an updated emissions test, "more representative of on-road conditions". 
 
 Media playback is unsupported on your device Media caption Michael Horn, president and chief executive of Volkswagen Group of America: "Our company was dishonest... we have totally screwed up" 
 
 Fines looming 
 
 France's Mr Sapin said inquiries in Europe had to be conducted "at a European level". 
 
 "We are a European market with European rules," he told Europe 1 radio. "It is these that have to be respected. It is these that have been violated in the United States." 
 
 Elsewhere, the South Korean government said it would test up to 5,000 Jetta and Golf cars, along with Audi A3s made in 2014 and 2015. 
 
 Its investigation will be expanded to all German diesel cars if issues are found. 
 
 VW shares plunged nearly 20% on Monday after the US Environmental Protection Agency (EPA) found that software in several diesel cars could deceive regulators. 
 
 Volkswagen was ordered to recall half a million cars in the US on Friday. 
 
 In addition to paying for the recall, VW faces fines that could add up to billions of dollars. There may also be criminal charges for VW executives. 
 
 The White House in Washington also reportedly said it was "quite concerned" about VW's conduct. 
 
 Volkswagen scandal 11 million Vehicles affected worldwide €6.5bn Set aside by VW 
 
 $18bn Potential fines 
 
 No. 1 Global carmaker in sales 
 
 Analysis: Richard Westcott, Transport Correspondent 
 
 There's one question people keep asking me at the moment. Is this the car industry's version of Libor, the scandal that rocked the financial world? 
 
 It's way too early to say just yet. But the pressure is now on the car industry to prove that cheating the pollution figures isn't a widespread problem stretching across both sides of the Atlantic. 
 
 The German government is investigating whether other companies are massaging their emissions data. The American regulator is widening its probe to other carmakers. 
 
 If they dig up more examples, the implications could be huge. Fines running into billions. A complete loss of credibility. And worst of all, the possibility that people have become ill or even died early because of higher emissions. 
 
 Americans don't tend to buy diesels. They represent just 3% of their car market. But half of all new cars sold in Europe are a diesel. 
 
 Diesel cars: Is it time to switch to a cleaner fuel? 
 
 Chief apologises 
 
 Volkswagen chief executive Martin Winterkorn apologised after the scandal emerged and said he would "support" the German transport ministry's investigation into the carmaker. 
 
 He has launched an investigation into the software, which allowed VW cars to emit less during tests than they would while driving normally. 
 
 "We do not and will not tolerate violations of any kind of our internal rules or of the law," Mr Winterkorn said. 
 
 The EPA found the "defeat device", the device that allowed VW cars to emit less during tests than they would while driving normally, in diesel cars including the Audi A3 and the VW Jetta, Beetle, Golf and Passat models. 
 
 VW has stopped selling the relevant diesel models in the US, where diesel cars account for about a quarter of its sales. 
 
 'A very bad light' 
 
 The EPA said that the fine for each vehicle that did not comply with federal clean air rules would be up to $37,500 (£24,000). With 482,000 cars sold since 2008 involved in the allegations, it means the fines could reach $18bn. 
 
 That would be a considerable amount, even for the company that recently overtook Toyota to be the world's top-selling vehicle maker in the first six months of the year. Its stock market value is about €66bn ($75bn; £48bn). 
 
 VW has ordered an external investigation, although it has not revealed who will be conducting it. 
 
 "It's clearly putting German industry under a very bad light," former VW employee Arndt Ellinghorst, now head of global automotive research at Evercore ISI, told BBC News. 
 
 Mr Ellinghorst explained why it was so difficult to sell diesel cars in the US: "Carmakers have to comply with 31mg NOx (nitrogen oxide) emissions per km. In Europe, that's 80mg, so it's much easier to comply in Europe when you're selling a diesel vehicle compared to the US. 
 
 "It makes cars far more expensive, because carmakers have to add more technology." ||||| A veteran Volkswagen AG engineer pleaded guilty to conspiring to defraud U.S. regulators and customers, the first criminal charge in the Justice Department’s year-long investigation into the company’s rigging of federal air-pollution tests. 
 
 The engineer, James Liang, who entered his plea in Detroit federal court on Friday, is cooperating with the investigation, increasing pressure on higher-ranking officials of the company. His lawyer said that Liang was “one of many at Volkswagen” involved in the scheme. 
 
 Although the company has already agreed to settlements that may total $16.5 billion to get 482,000 emissions-cheating diesel cars off U.S. roads., the Justice Department is continuing its criminal inquiry into the company’s manipulation of emissions systems. 
 
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 “Almost from the beginning of VW’s process to design its new ‘clean diesel’ vehicles, Liang and his fellow co-conspirators designed these VW diesel vehicles not to meet U.S. emissions standards, but to cheat the testing process,” prosecutors contend in an indictment unsealed on Friday. 
 
 The government described a 10-year conspiracy begun by Volkswagen employees as soon as they realized they couldn’t meet new U.S. emissions standards. As the emissions-control devices began to age, Liang and others doubled down and programmed the devices to run dirty for longer, hoping to avoid warranty claims. Later, when confronted by regulators, they tried to cover up their actions. 
 
 The conspiracy described by the government will make it difficult for the company to dismiss the scheme as only the work of rogue engineers and will complicate its efforts to revive its scandal-tainted business. 
 
 VW’s shares fell as much as 1 percent on Friday and closed down 0.83 percent at 124.85 euros in German trading. 
 
 Liang, 62 years old, spent 25 years with Volkswagen in Wolfsburg, Germany, before moving to the U.S. in 2008, according to an indictment unsealed on Friday. As the head of the Diesel Competence unit in the U.S., he reported to Germany, prosecutors said. 
 
 “I know VW did not disclose the defeat device to U.S. regulators in order to sell the cars in the U.S.,” Liang told the judge in court on Friday. “That’s what makes me guilty.” 
 
 ‘Clean Diesel’ 
 
 In 2006, while still in Wolfsburg, Liang and his co-conspirators began to design a “clean diesel” engine for sale in the U.S. -- a project known within VW as “US ’07.” From the beginning, prosecutors said, Liang and his co-conspirators realized they couldn’t design a diesel engine that could both meet U.S. emissions standards and also satisfy customers. 
 
 So, prosecutors wrote, they “designed, created and implemented a software function (the “defeat device”) to cheat the standard U.S. emissions test.” The defeat device software -- which they called “acoustic function,” “cycle beating software” or “emissions-tight mode” -- was designed to recognize when the car was undergoing U.S. emissions testing and switch to a lower-emissions setting. 
 
 Those engines went on sale in beginning in the 2009 model year. In September 2013, Liang exchanged an e-mail with a VW colleague about preparing one of the vehicles for a test. “If this goes through without problems, the function is probably truly watertight! ;.) ” the employee wrote to Liang, according to the indictment. 
 
 At one point, VW’s warranty costs rose as the emissions systems’ parts and components failed. Some of Liang’s colleagues believed that was because the cars would sometimes operate on the road in the low-emission mode, the government said in Liang’s plea agreement. 
 
 Liang and his co-conspirators updated the software in 2014. VW fraudulently told customers that the update was intended to improve the cars, the government said, when in fact it was intended to keep the cars running in dirtier “defeat” mode on the road. 
 
 Urging ‘Creativity’ 
 
 By 2014, e-mails between Liang and other employees were asking how to respond to regulators in California concerned about large discrepancies between the cars’ emissions in the lab and on the road. A VW employee sent Liang and other workers an e-mail in 2015 for suggestions. In German, that employee wrote: “The key word ‘creativity’ would be helpful here.” 
 
 Later, the employees received a group update saying that California was waiting for answers. “We still have no good explanations!!!!!” the employee wrote. 
 
 Liang admitted on Friday to a charge of conspiracy to commit fraud against U.S. regulators and customers and to violate the Clean Air Act. He faces a maximum penalty of five years in prison and a fine of up to $250,000, although cooperators often receive leniency at sentencing. He is to be sentenced on Jan. 11. 
 
 Liang “is coming here to Detroit today to accept responsibility for his actions,” said his lawyer, Daniel Nixon. “He is remorseful.” 
 
 Other Probes 
 
 The information Liang is providing to prosecutors could speed the investigation of the company. Settlement talks in the criminal matter could be resolved by the end of the year, according to two people familiar with the probe. Germany and South Korea are conducting separate criminal probes of the company. 
 
 Jeannine Ginivan, a Volkswagen spokeswoman, declined to comment on Liang’s guilty plea. 
 
 The Justice Department a year ago put in place a policy requiring that all corporate cases include a plan to charge individuals -- a policy that came amid criticism that company officials weren’t being held accountable even as the businesses paid billions of dollars in fines. The department has said companies that want credit for cooperating with investigators must name individuals whom they consider responsible for any misconduct. 
 
 “Today’s criminal charges are just the beginning in the VW case,” said David Uhlmann, a law professor at the University of Michigan in Ann Arbor and a former head of environmental prosecutions at the Justice Department. He said he expects more charges against individuals. “What is less clear is whether there are more individuals in the United States who can be charged or whether everyone else is a German national who would need to be extradited to be brought to justice.” 
 
 Top-ranking auto executives have rarely been prosecuted in their companies’ scandals. In cases brought against General Motors Co. for ignition problems and Toyota Motor Corp. for uncontrolled acceleration, no high-ranking executives were accused of wrongdoing in the U.S. 
 
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 VW still faces lawsuits by at least five states and by investors and dealerships in the U.S. There are parallel lawsuits, including consumer complaints, in Germany, all of which could raise the scandal’s price tag for the automaker. 
 
 Future expenses could include hundreds of millions of dollars in fees for the lawyers who secured the multibillion-dollar deal for car owners.
– After rigging emissions tests to fool regulators, Volkswagen appears to have belatedly decided that honesty is the best policy. Michael Horn, the chief of the German automaker's US business, told an audience at an event in New York last night that the company had cheated, the BBC reports. "Our company was dishonest with the EPA, and the California air resources board and with all of you, and in my German words: We have totally screwed up," he said, promising that the company would "make this right" and "will pay what we have to pay." The company will face around $18 billion in fines in the US alone, and countries such as South Korea are now also investigating emissions from Volkswagen's diesel vehicles, the AP reports. Volkswagen may be punished with more than fines: Sources tell Bloomberg that the Justice Department—which recently launched a push to go after individuals as well as corporations in cases of corporate wrongdoing—is considering criminal proceedings, which could involve executives in both Germany and the US. The scandal has already wiped more than $16 billion off Volkswagen's share price and the fallout could just be beginning. Experts tell the Guardian that the use of software to cheat emissions tests could be widespread in other countries and with other manufacturers. (Some 500,000 diesel Volkswagen vehicles in the US have been recalled, and Consumer Reports has yanked its favorable ratings.)