In an unprecedented admission, Volkswagen said early Tuesday that its practice of fitting diesel cars with software designed to fake pollution tests was installed on 11 million vehicles worldwide—and that the company was setting aside nearly $7.3 billion to address the issue.

The news came just hours after Volkswagen’s U.S. chief offered his own apologies for the scandal uncovered by U.S. researchers, which found that four-cylinder diesels in 482,000 VWs and Audis sold since 2009 emitted up to 40 times more of the smog-causing pollutant nitrogen oxide than allowed by law. The cars’ engine software was designed by VW to restrict pollution only when it sensed it was being tested for it—and run more lax controls at all other times.

“So let’s be clear, our company was dishonest with the EPA, with the California Air Resources Board, and with you,” said Michael Horn during the reveal of the 2015 Passat in New York. “In my German words, we totally screwed up. We must fix those cars, and prevent this from ever happening again.



“This kind of behavior is totally inconsistent with our qualities. We are committed to do what must be done and to begin to restore your trust. We will pay what we have to pay.”



German media reported that the contract of Volkswagen CEO Martin Winterkorn would not be renewed after Friday; Winterkorn was chief of vehicle development at the time the cars in question were sold. His replacement was reported to be Porsche CEO Matthias Mueller. A VW spokesman in Europe denied the report.

Later in the day, Winterkorn released a video statement: "I am endlessly sorry that we betrayed the trust of millions of people…Swift and comprehensive clarification has now utmost priority. To make it very clear: manipulation at VW must never happen again.“

Related: Volkswagen Played Me For A Chump—And Likely You, Too

The Wall Street Journal reported Monday that the U.S. Department of Justice has opened a criminal probe into VW’s actions, and Congress will hold hearings as well. Under the federal Clean-Air Act, VW would be liable for up to $18 billion in fines for the violation, although the EPA has never imposed a fine of that size in similar cases where automakers were found to have skirted pollution rules.

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In its statement, VW said the software was installed in other VW diesels, but only affected the pollution levels in its 2-liter turbodiesel motor, which was sold in Beetles, Jettas, Passats, Golfs and the Audi A3 in this country. It said it was in contact with European authorities and others worldwide.

“Volkswagen does not tolerate any kind of violation of laws whatsoever. It is and remains the top priority of the Board of Management to win back lost trust and to avert damage to our customers,” the company said.



VW, one of the world’s largest automakers, has had its share prices plunge 30 percent since the crisis hit. The EPA has said it will review test results from other diesel vehicles for signs of similar software switches.

While VW diesels remain safe to drive, bringing them into compliance could be as simple as a software upgrade—or require a more complicated, and expensive, retrofit of pollution controls.