Experts have warned that "millions" of cars on British roads could be recalled on the back of the claims that it had installed a "detect device" which would enable it to effectively cheat during emissions tests.
The claims, made by the US' Environmental Protection Agency, will force the car company to recall 500,000 Volkswagen and Audi vehicles manufactured between 2009 and 2015 and prompted a global sell-off of Volkswagen shares yesterday, taking the share price to a six-year low. The Department for Justice has reportedly begun a criminal investigation into the claims.
But pressure group Transport and Environment claims the impact will be more widely felt internationally.
Clean vehicles manager at T&E Greg Archer said: "Diesel cars are niche in the US, and in most of the rest of the world, representing just one in seven cars sold worldwide. The VW recall is not large by global standards. But in Europe over half of new cars are diesels – 7.5 million of the 10 million sold globally last year were bought in Europe.
"There is strong evidence that similar illegal devices are also used in Europe by both VW and other manufacturers. Since 2009, when VW began using defeat devices, over 40 million diesel cars have been sold in Europe, a sixth of all cars on the road today."
The scandal has already spread beyond the US borders, with South Korea saying it plans to investigate three of its diesel models.