Can VW Survive?

Volkswagen AG said it found faulty emissions readings for the first time in gasoline-powered vehicles, widening a scandal that so far had centered on diesel engines. Separately, the company’s Porsche unit said it’s halting North American sales of a model criticized by U.S. regulators.

Volkswagen said an internal probe showed 800,000 cars had “unexplained inconsistencies” concerning their carbon-dioxide output. Previously, the automaker estimated it would need to recall 11 million vehicles worldwide — more than Volkswagen sold last year.

The crisis that emerged after Volkswagen admitted in September to cheating U.S. pollution tests for years with illegal software has shaved more than one-third of the company’s stock price and led to a leadership change. Today’s revelation adds to the pressure on Volkswagen’s new chief executive officer, Matthias Mueller.

Most of the affected cars are in Europe and the 2 billion euros in possible costs are an initial estimate, according to the spokesman. The automaker will determine how much money to set aside once the probe has been finalized, he said.

The EPA said its new investigation centers on the Porsche Cayenne and VW Touareg sport utility vehicles and as well as larger sedans and the Q5 SUV from Audi.

But then late Tuesday, Porsche’s North American division said it would voluntarily discontinue sales of diesel-powered Cayennes from model years 2014 to 2016 until further notice. The Atlanta-based unit’s statement reiterated that the EPA notice was unexpected and that owners can operate their vehicles normally.

Mueller has pledged to overhaul the company’s corporate culture, which he said must change to create a more transparent environment that can discover possible faults.

“This is a painful process, but it is our only alternative,” Mueller said in an e-mailed statement. VW “deeply regrets this situation” and “will stop at nothing and nobody” to get to the bottom of the matter, he said.

The scandal has weighed heavily on Volkswagen’s earnings. The automaker reported its first quarterly loss last month in at least 15 years because of the reserve funds set aside to implement fixes.

Fixing VW