Volkswagen CEO Martin Winterkorn faced a reckoning with his board today to explain how the company falsified US emissions tests in the biggest scandal in the 78-year history of the world's largest car maker.
Senior figures on the board's five-member executive committee grilled Winterkorn at the meeting at the company's headquarters in Wolfsburg, Germany.
Winterkorn is due to have his contract extended at the end of this week and has so far shown no sign of resigning over the affair, after pledging "utmost transparency" in ongoing investigations.
The board must decide by Friday whether to extend the 68-year-old executive's contract.
A source familiar with the deliberations said the board was in a "tricky situation", trying to make a decision without yet knowing the full extent of the CEO's role in the scandal.
A story in the Tagesspiegel newspaper, denied by Volkswagen,said the board would replace him with Matthias Mueller, head of the company's Porsche sports car business.
The VW emissions scandal in numbers http://t.co/CSwDBzwWAQ pic.twitter.com/Y8u91fg8Zu
— RTÉ Business (@RTEbusiness) September 22, 2015
Winterkorn did not mention his future in a video message posted on the company's website in which he repeated his apology for the scandal, which has wiped out tens of billions of dollars from the company's value.
The US Environmental Protection Agency (EPA) says Volkswagen could face penalties of up to $18 billion for cheating emissions tests.
The company has said it would set aside €6.5 billion in its third-quarter accounts to help cover the costs.
The US Justice Department has launched a criminal probe, a source familiar with the matter said.
New York and other state attorneys general are also forming a group to investigate, NewYork Attorney General Eric Schneiderman said.
"No company should be allowed to evade our environmental laws or promise consumers a fake bill of goods," Schneiderman said in a statement.
Other countries in Europe and Asia have said they will also launch investigations into Volkswagens and other vehicles.
The crisis has sent shockwaves through Germany, with Chancellor Angela Merkel calling for "complete transparency" from a company seen for generations as a paragon of engineering excellence.
Some analysts expect Winterkorn to go, whether he knew about the wrongdoing or not.
Volkswagen shares lost more than a third of their value inthe first two days of trading since the scandal broke. Shares in the company were up over 7% in afternoon trade today.
It has emerged that Volkswagen was challenged by authorities as far back as 2014 over tests showing emissions exceeded California state and US federal limits, but held off on admitting wrongdoing until regulators threatened to withhold certification for its 2016 diesel models.
Winterkorn has built up Volkswagen since he took the helm in 2007, achieving success with a portfolio of strong brands ranging from budget Seats and Skodas to premium Audis and top-end Lamborghinis and Bugattis.
But he has also faced criticism for a centralised management style that some analysts say hampered the company's efforts to address underperformance in North America, for decades Volkswagen's Achilles heel.
There have been no suggestions so far that other car makers have engaged in the same practices as Volkswagen. Germany's BMW and Daimler have said the accusations against Volkswagen did not apply to them.
But shares in those companies as well as rivals including Peugeot, Renault and Fiat Chrysler fell yesterday amid signs regulators across the world will step up scrutiny of vehicle tests, which environmentalists have long criticised for exaggerating fuel-saving and emissions results.
The EPA said on Monday it would widen its investigation to other automakers, and French Finance Minister Michel Sapin said an EU-wide inquiry was needed too.
Germany's Transport Ministry said it would send an investigative commission to study whether cars built at Volkswagen's headquarters complied with German and European emissions guidelines.
Italy asked VW to prove the cars sold i nthat country do not contain the "defeat devices" at the centre of the scandal, while Switzerland also said it would investigate Volkswagen's diesel vehicle emissions tests.
