Volkswagen (VW) shares are down 20 per cent, falling just shy of a six-year low, wiping billions from the company's value.
The drop comes after chief executive Martin Winterkorn apologised on Sunday for manipulating the carbon emissions data from Volkswagen and Audi vehicles.
He said in a statement: “I personally am deeply sorry that we have broken the trust of our customers and the public.
“We will cooperate fully with the responsible agencies, with transparency and urgency, to clearly, openly, and completely establish all of the facts of this case. Volkswagen has ordered an external investigation of this matter.”
The drop wiped out about €16bn (£11.6bn) in value, making the Germany-based company worth €60.4bn.
Read more: Volkswagen told to recall 500,000 cars.
On Friday, the US Environmental Protection Agency (EPA) ordered the company to withdraw nearly half a million cars and claimed that it had deliberately installed a device to mislead emissions testers.
VW could face fines of up to $37,500 (£24,000) per vehicle, according to the EPA. The total fine could be more than $18bn, which would wipe out nearly all VW's cash balance, though analysts have said the actual figure is likely to be much lower.
The EPA claimed the device is programmed to detect when the car is undergoing emissions test, during which time it will turn on its full emissions control systems. These controls are reportedly then turned off when the car is driving in “normal” situations, when the cars pollute more heavily than reported by Volkswagen.
VW shares fell as much as 22 per cent during morning trading and at pixel time were trading down 20.54 per cent.