Volkswagen suspends sales of Audi, VW diesels cited by EPA

Moody’s hit embattled German automaker Volkswagen with a credit downgrade Wednesday, saying the company’s reputation and earnings were at risk from the growing emissions cheating scandal.

In EPA’s issued second Notice of Violation, the list added diesel versions of the 2016 Audi Q5, A6 Quattro, A7 Quattro, A8, A8L, Porsche 2015 Cayenne and the Volkswagen 2014 Touareg.

In a public statement released Tuesday, Porsche said it was stopping sales of 2014 through 2016 Cayenne Diesel SUVs, but it did not admit to any wrongdoing.

The cars were sold under the Volkswagen, Audi, SEAT and Skoda brands, majority in Europe and none in the United States. “The majority of the vehicles concerned have diesel engines”.

All vehicles in the USA must comply with specific standards for conventional pollutants such as nitrogen oxide as well as greenhouse gas emissions such as carbon dioxide. On Monday, the EPA has extended the investigation of the emissions scandal including the V6 diesel engines from the VW’s luxury division Porsche and a few models from Audi. But the latest admission will force the troubled carmaker to incur another euros 2 billion ($2.2 billion) in fresh financial penalties because of tax breaks that Europe had granted on cars with low carbon dioxide emissions. Based on this discovery, the company estimates that around 800,000 vehicles may be affected.

Volkswagen later admitted that around 11 million cars sold around the world were fitted with the software to deceive the results of emission control tests.

Moody’s Investors Service said Wednesday it had cut the rating on VW’s long-term unsecured debt, short-term debt known as commercial paper, and subordinated notes issued by its finance arm and guaranteed by the company. The €6.7 billion only concerns the recall the automaker is facing in 2016, including costs of fixing the vehicles and necessary service measures, and doesn’t include expenses related to any legal measures, or potential penalties and fines. The firm rejected allegations that it is cheating on diesel-emissions tests included Porsche and other high-end vehicles.

Prosecutors in Braunschweig are already looking into VW’s diesel products, and will examine the newly disclosed information with a decision on a new investigation coming by next week, spokesman Klaus Ziehe said by phone Thursday. Previously the four-cylinder engines were found to contain the defect devices.