VW understated fuel consumption on 800,000 gas powered cars

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VW says fuel usage understated on some models; Porsche warns

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Volkswagen (VOWG_p.DE) on Tuesday said it had understated the fuel consumption of 800,000 cars sold in Europe, while majority stakeholder Porsche Automobil Holding SE (PSHG_p.DE) warned that VW's latest findings could further weigh on its results.

The latest revelation about fuel economy and carbon dioxide emissions, which Germany's largest automaker said represented a roughly 2 billion euro ($2.19 billion) economic risk, deepened the crisis at VW.

The scandal initially centered on software on up to 11 million diesel vehicles worldwide that VW admitted vastly understated their actual emissions of smog-causing pollutant nitrogen oxide.

U.S. environmental regulators said on Monday that similar "defeat devices" were installed on larger 3.0 liter engines used in luxury sport utility vehicles from Porsche and Audi, although VW has denied those allegations.

Porsche's North American unit said it was discontinuing sales of Porsche Cayenne diesel sport utility vehicles until further notice, citing the allegations.

The latest findings that VW understated fuel consumption and carbon dioxide emissions, areas which U.S. regulators have yet to address, were disclosed as VW continues a broad review of its handling of all pollution-related issues.

"VW is leaving us all speechless," said Arndt Ellinghorst of banking advisory firm Evercore ISI. "It seems to us that this is another issue triggered by VW's internal investigation and potentially related to Europe."

The carmaker said it would immediately start talking to "responsible authorities" about what to do about the latest findings.

"From the very start I have pushed hard for the relentless and comprehensive clarification of events," Volkswagen Chief Executive Matthias Mueller said in a statement. "We will stop at nothing and nobody. This is a painful process but it is our only alternative."

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I know that companies occasionally stretch the truth about their products, but it just seems like this emissions scandal has exposed some serious issues with VW's corporate culture in both the US and Europe.