Germany’s economy minister Sigmar Gabriel expressed concern over the impact of what he called “a bad case” on the country’s vital auto industry and he urged Volkswagen to fully clear up the allegations.

The company also said in a statement that it had set aside 6.5 billion euros (7.3 billion USA dollars) to cover the costs of the issue.

VW shares plunged 17 percent on Monday, followed by another 23 percent Tuesday to a low of 101.30 euros during trade on the Frankfurt stock exchange. Investors dumped the firm’s shares after it was accused by America’s Environmental Protection Agency (EPA) of cheating emission tests on its diesel-powered vehicles.

The news came just hours after Volkswagen’s USA chief offered his own apologies for the scandal uncovered by US 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 Environmental Protection Agency (EPA) in the USA said on Friday that some diesel-engined cars sold by Volkswagen and Audi models in the last six years – including the Passat, Golf, Beetle and Audi A3 – had used sophisticated algorithms that were specifically created to deceive laboratory testing programmes.

“Volkswagen is working intensely to eliminate these deviations through technical measures”.

A congressional panel will convene in the near future to investigate what appears to be a deliberate plan by Volkswagen to get around US emissions regulations for almost a half-million of its vehicles with diesel engines.

“Further internal investigations have shown that the software concerned is also installed in other diesel vehicles”, VW said in a statement.

Volkswagen advertised the affected models as being better for the environment.

However, the automaker says that “for the majority of these engines the software does not have any effect”.

The “defeat devices” meant that true emissions levels were hidden, it is claimed. The Justice Department and Volkswagen declined to comment on the report.

While VW’s statement Tuesday does not mention any fines or penalties, the company faces a maximum of billion in fines in the USA , though its losses resulting from this scandal could be even bigger. “I personally am deeply sorry that we have broken the trust of our customers and the public”, he said.

Analysts state that Winterkorn may have to resign following the scandal.

Amid the scandal, Volkswagen’s CEO looks to be in trouble.