(Bloomberg) -- Volkswagen AG’s emissions scandal is stillwidening more than two months after its cheating became public,undercutting the carmaker’s argument that only a few rogueengineers knew of the manipulations.

The U.S. Environmental Protection Agency and the California AirResources Board are now probing Volkswagen, Audi and Porsche modelswith 3.0-liter diesel engines as far back as the 2009 model year,after initially focusing on newer versions. That’s in addition tothe smaller cars that VW admitted in September wererigged to pass emissions tests.

The probe extends the reach of the scandal from VW’sheadquarters in Wolfsburg, Germany, to Audi, the Bavarianluxury-car unit that also builds engines for Porsche. Volkswagenhad initially denied any cheating when first confronted about asmaller number of 3.0-liter Audi-engineered motors earlier thismonth. On Friday, the carmaker conceded that U.S. regulatorsconsidered one feature of the engine-control software to beillegal.

With the latest revelations, “nobody can really say that itsimply slipped through,” said Stefan Bratzel, director of theCenter of Automotive Management at the University of AppliedSciences in Bergisch Gladbach, Germany. “VW has acultural problem. It’s not just about individuals. It’s aboutstructures that need to change.”

Three fronts

Volkswagen is facing a scandal on three fronts:

1. the cheating software installed inabout 11 million vehicles with 1.2-, 1.6- and 2.0-literdiesel engines;

2. irregular carbon- dioxideratings on about 800,000 vehicles;and

3. questionable software in 85,000larger diesel engines targeted in the EPA’s latestprobe.

While Chief Executive Officer Matthias Mueller has vowed athorough investigation, answers have been slow in coming.

The shares fell 0.9% to 107.55 euros at 2:36 p.m. in Frankfurt.Volkswagen has lost 34%, or 18.4 billion euros ($19.6 billion) inmarket value, since the cheating scandal became public on Sept.18.

“The strategy of revealing only a little bit at a time is notwhat regulators want to see, and it’s unsettling for customers,”said Holger Schmidt, a Frankfurt-based analyst with Equinet.“At present, they still don’t seem to have the situation undercontrol.”

Global deliveries at Volkswagen’s namesake brand dropped 5.3% inOctober, as the company lost market share in Europe, the U.S. andChina. To draw in customers, Volkswagen is responding withincentives, including zero-down payment and zero-percent financingdeals in the U.S. In Germany, the carmaker’s dealers offeredcustomers an average 11.2% off the sticker price in October, 1.6percentage points more than in the previous month, according totrade publication Autohaus PulsSchlag.

Spending cuts

With costs from the scandal so far tallying at least 8.7 billioneuros, Volkswagen is putting non-essential projects on hold andannounced on Friday that it will trim capital expenditures by 7% to12 billion euros ($12.8 billion) next year. While thecompany halted work on a design center in Germany and a paintshop in Mexico, it left much of biggest investment budget in theauto industry untouched.

The company’s supervisory board plans to meet on Dec. 9 todiscuss the crisis, including feedback from regulators on proposalsto fix cars, people familiar with the matter said. Volkswagenpresented California regulators on Friday with a proposal to makeits 2.0-liter diesel engines compliant with pollution standards forsmog-causing nitrogen oxides. German regulators are reviewing aplan presented Nov. 16 to repair 1.6- liter diesel motors.

Volkswagen rejected the EPA’s allegations about rigging the3.0-liter engine in early November, but said it would work with theregulator to clarify the issue. A high-ranking Audi delegationtraveled to the U.S. last week to discuss the issues withregulators, revealing that the software targeted by the EPA, knownas an auxiliary emissions control device, was present in oldermodels.

“We already stressed in our statement from Nov. 2 thatVolkswagen will fully cooperate with the EPA to clarify the issuethoroughly,” the carmaker said Monday in an e-mailed statement.“Exactly that has happened.”

--With assistance from Chris Reiter, Jeff Plungis and DanaHull.

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