The true dimensions of the crisis surrounding Volkswagen AG no longer seem clear.
When the emissions scandal erupted Sept. 18, it was thought to affect one type of pollutant in one type of engine, and mostly just one of the group's eight car brands.
But VW's troubles have spread rapidly since to multiple fronts. Fresh EPA charges of emissions-rigging in the U.S. tarnished the vaunted Porsche brand and cast a larger shadow on Audi, which had largely escaped infamy. VW's own investigation has found inaccurate emissions ratings assigned to some 800,000 cars, not all of them diesels.
Analysts now expect more painful revelations to come as internal and external investigations escalate. And in the absence of clear clues about a fix, a compensation plan or the progress of VW's investigation, they've begun to question whether VW's revamped executive team has enough of a handle on the spiraling crisis.
"It's a like a virus that's spreading," said Dave Sullivan, an analyst with AutoPacific. "With every new bit of information that's uncovered, it digs the knife in a little deeper and produces more doubt and skepticism that they have an understanding of how deep this crisis is."
The EPA's revelation last week of a software defeat device detected in VW's 3.0-liter V-6 diesels appeared to catch VW off-guard, raising concerns in the investment community about the intensity and integrity of VW's internal investigation.
"Fundamentally speaking, Volkswagen normally should not be valued anywhere below 200 euros ($215) per share," said Arndt Ellinghorst, global head of automotive research at Evercore ISI, who follows VW closely. "And yet the stock is trading for half that price. This shows the financial market has clearly lost all confidence, and there is just not enough visibility to trust anyone at the company right now."
Even before last week, the scale of VW's problems was daunting. Some 11 million diesel cars worldwide, roughly a year's worth of global group sales, were in line for some kind of software or hardware fix to bring them into compliance with regulations. Lawsuits from angry customers were piling up. And regulatory agencies around the world had launched investigations.
VW overhauled its management and corporate structure, naming Porsche chief Matthias Mueller to succeed disgraced VW Group CEO Martin Winterkorn.
Now that Porsche also is embroiled in the scandal, Mueller himself could be on the hot seat. He ran Porsche for almost six years.
"As far as the U.S. justice officials, it's going to be much more difficult for Mueller to credibly lead Volkswagen's efforts to uncover the fraud behind the scandal," said Ferdinand Dudenhoeffer, head of the Center for Automotive Research at the University of Duisburg-Essen in Germany.
In its announcement last week, VW said its continuing diesel investigation found the company had misstated its CO2 emissions for roughly 800,000 cars sold, resulting in fuel economy ratings that were inflated by 10 to 15 percent in some cases. These vehicles include not only versions of VW's BlueMotion line of diesels that claim to be environmentally friendly, but also some 98,000 units of VW's 1.4-liter ACT gasoline engines.
In a statement, VW's supervisory board said it was "deeply concerned" about the CO2 misstatements. Mueller said VW's management board "deeply regrets" the situation and emphasized that the investigation would leave no stone unturned.
"We will stop at nothing and nobody," Mueller said. "This is a painful process, but it is our only alternative. For us, the only thing that counts is the truth."
Shares of Volkswagen's so-called preference stock tumbled more than 13 percent in the three days after it announced the CO2 misstatement and the $2.17 billion in estimated associated costs. These more heavily traded, nonvoting shares are a component of the German blue-chip stock index and serve as barometer of investor confidence in VW's ability to weather the scandal.
"To discover two separate instances of apparent fraud is astonishing, so it seems increasingly clear that the organization was not under control before this crisis," said Exane BNP Paribas analyst Stuart Pearson. "What's frustrating is the lack of visibility. Markets do not know what else will be found."
In addition to investor pressure, the German government has ordered wide-scale checks of Volks-wagen Group cars under the supervision of the country's auto industry regulator, preferring not to trust VW with the task.
Analysts said VW cannot afford to wait much longer to project control and clearly articulate the scope of the wrongdoing. "Volkswagen needs to draw a line under the issue and say we've had a thorough audit and no more irregularities exist," said Pearson. "Until they feel comfortable saying that, I think it will be difficult for most investors to go near the stock."
Ellinghorst said VW needs to finish that task within several weeks. "The big fear is a never-ending drip feed of negative headlines," he said. "Even for a company as complex as Volkswagen, this should not be rocket science."