By Patrick Rucker and Timothy Gardner
WASHINGTON (Reuters) - Volkswagen (DE:VOWG) used devices to cheat air pollution tests in diesel luxury vehicles, U.S. environmental regulators said on Monday, in a new blow to the automaker already reeling from similar allegations regarding millions of smaller diesel engines.
The U.S. Environmental Protection Agency said it is now looking at 3.0-liter V6 diesel engines used mostly in larger, more expensive models like the Porsche Cayenne sport utility vehicle in addition to engines on Jettas, Passats and other mass-market models whose test-deceiving software were initially targeted by the agency in mid-September.
Volkswagen in a response Monday took issue with the EPA's findings, saying that "no software has been installed" in its 3.0-liter V6 diesel engines "to alter emissions characteristics in a forbidden manner."
VW made similar denials for more than a year to U.S. regulators before admitting to cheating on the four-cylinder diesels.
A VW group source familiar with the EPA investigation on Monday said, "We want to know more from the regulators about how they came to this conclusion. We're not sure how they came up with their findings, and would like a better opportunity to review the data with the regulators."
The V6 diesel was designed by VW's Audi unit and widely used in premium models sold by the VW, Audi and Porsche brands in model years 2014 through 2016.
The move pulls Porsche and Audi deeper into the scandal that has already engulfed the corporate parent Volkswagen AG (DE:VOWG_p) and its mass-market VW brand, shaving nearly 20 billion euros ($22 billion) off its market capitalization.
On the road, emissions of the smog-causing pollutant nitrogen oxide on the affected high-end vehicles could be nine times higher than allowed, the EPA said.
"The latest revelations raise the question, where does VW's road of deceit end?," House Energy and Commerce Committee Chairman Fred Upton said in a statement, adding that the disclosure "prompts questions regarding the prevalence of the emissions cheating and how it went undetected for so long."
Democratic Senators Richard Blumenthal and Edward Markey said the automaker "should be held accountable for illegally using defeat devices to cheat consumers and emissions controls. The administration should reverse any CAFE or other benefits VW might have enjoyed as a result of illegal behavior."
DEFEAT DEVICES
About 10,000 of the luxury cars from Volkswagen units are fitted with the illegal software device, U.S. and California regulators said. Many more may be on the road. VW in 2013 said it had built and sold more than 1.6 million 3.0 V6 TDI engines worldwide, just before the current version of the engine was introduced in 2014.
It is not clear how many models fitted with the current version of the V-6 may have the illegal software. The EPA said it cited only those vehicles and model years that it had recently tested. It did not say if it has tested earlier versions of the engine.
In September, Volkswagen admitted it installed software that can cheat emissions tests, called defeat devices, in smaller, four-cylinder engines on about 482,000 cars in the United States and more than 11 million worldwide.
Among the diesel models officials named on Monday as being in violation of U.S. laws are five Audi models, including the A6 sedan and the Q5 SUV. Also cited were the VW Touareg and Porsche Cayenne.
In a separate statement, Porsche said it was "surprised to learn this information."
"Until this notice, all of our information was that the Porsche Cayenne Diesel is fully compliant," it added.
The emissions cheats allowed the vehicles to pass tests meant to monitor vehicles' emissions of nitrogen oxide.
The mechanism detects when an engine is being tested for tailpipe emissions and then alters the emission controls to permit more pollutants in actual driving.
Carmakers are permitted to use software to optimize engine performance in some cases, but sidestepping emissions controls with a defeat device is prohibited by law.
Volkswagen has yet to come up with solutions to address illegal software on three generations of four-cylinder diesels first cited by the EPA on September 18.
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