More VW Emission 'Irregularities' As Investors Question Confrontation With EPA

Another day, another Volkswagen emission scandal? It's beginning to seem like it.

The latest news is that VW Group in Germany has found "irregularities" in carbon-dioxide emission levels in roughly 800,000 vehicles, mostly diesels, producing fuel-economy figures that were too high.

That discovery, it said, exposes it to a potential cost of roughly $2.2 billion--on top of the $7.3 billion set aside to cover costs of earlier admissions that it had fitted "defeat device" software to about 11 million diesel vehicles.

DON'T MISS: VW In Germany Denies EPA V-6 Diesel Charges, Porsche Pulls Cars Off Sale: UPDATED

Friday, we heard from the EPA that it had also detected "defeat device" software in additional VW Group engines: the 3.0-liter V-6 TDI diesels used in a variety of high-priced sedan and SUV models from Audi and Porsche, as well as Volkswagen.

On Monday, VW Group headquarters in Germany flatly contradicted the U.S. environmental agency. In a statement, it denied that that any emission-related software in those engines had been used "in a forbidden manner."

Then, late last night, the German headquarters of VW issued two more statements. The first said, in part:

2015 Volkswagen Golf TDI SE

During the course of internal investigations, irregularities were found when determining type approval CO₂ levels. Based on present knowledge around 800,000 vehicles from the Volkswagen Group could be affected. An initial estimate puts the economic risks at approximately two billion euros.

In the second, the company's Supervisory Board--equivalent to a board of directors--wrote:

The Supervisory Board is deeply concerned by the discovery of irregularities found when determining CO₂levels for the type approval of Volkswagen Group vehicles. These irregularities came to light during the clarification process which, as announced, is being relentlessly and comprehensively pursued.

The Supervisory Board will continue to ensure swift and meticulous clarification. In this regard, the latest findings must be an incentive for the Supervisory Board and the Board of Management to do their utmost to resolve such irregularities and rebuild trust.

EARLIER: VW Diesel V-6 Engines Used By Audi, Porsche Have Cheat Software Too: EPA

VW Group has not specified what the new "irregularities" in carbon-dioxide emission levels may be, nor has it released further details explaining why it chose to come out swinging against the EPA.

But the corporation's behavior is increasing concern among investors, according to the U.K. Financial Times.

Both investors and analysts have "expressed dismay" at the way Volkswagen AG is addressing the growing set of crises, especially its direct confrontation with a powerful U.S. agency to which it had recently admitted blatant cheating on emission laws over eight years.

Consumer Reports tests 2015 Volkswagen Jetta TDI diesel in 'cheat mode,' October 2015 [video frame]

It may be that the EPA's latest discovery is not a "defeat device" but an "auxiliary emission control device," which is permitted to protect against damage to the engine or emission system.

All such AECDs must be disclosed to the EPA before testing, but certification of 2016 VW diesel models is being held up because the EPA discovered a previously undisclosed AECD in those cars.

Still, "I'm very surprised" at the company's confrontational approach, the FT quotes a leading investor in Volkswagen as saying. "This is very weird."

ALSO SEE: VW Diesel Owners In Limbo Until Recall Issued, While Cars Lose Value

Arndt Ellinghorst, head of global automotive research at Evercore ISI, called VW's denial "something quite extraordinary," suggesting that rather than fully cooperating, the company had opted for "full-on confrontation."

And while the number of vehicles affected is far smaller, the newest revelations may be more damaging to VW's lasting reputation, the paper says.

An analyst with Exane BNP Paribas suggests that the state of affairs indicates that Volkswagen doesn't have a grip on the situation it finds itself in.

Martin Winterkorn, (now former) CEO of Volkswagen AG, at opening of VW engine plant, Silao, Mexico

New executive management has now been in place for more than a month, led by Matthias Müller, previously CEO of Porsche, which had been unaffected until this week.

Yet concern only appears to be growing over VW's lack of transparency to date.

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