(Bloomberg) -- Volkswagen AG’s work to overcome theemissions-cheating scandal was set back after the California AirResources Board rejected its proposed engine fix as“incomplete,” just a day before Chief ExecutiveOfficer Matthias Mueller meets regulators to discuss ways outof the crisis. “Volkswagen made a decision to cheat on emissionstests and then tried to cover it up,” Mary Nichols, chairwoman ofthe state board, said Tuesday in an e-mailed statement. “Theyneed to make it right”

The rejection closely followed a bumble by Mueller, who in aSunday interview appeared to dismiss the crisis by saying Europe’slargest automaker “didn’t lie” to regulators about what amounts toa “technical problem.” The timing couldn’t be worse: VW also is inthe midst of complex technical talks with the California boardcounterparts at the U.S. EnvironmentalProtection Agency about possible fixes for about 480,000 dieselcars with 2-liter engines.

Related: Volkswagen sued by U.S. for cheating on emissionsstandards

On its website, the California board said it “determined thatthere was no easy and expeditious fix for the affected vehicles.”The EPA seconded the idea on Tuesday, saying it agreed with thestate regulator that VW’s plan can’t be approved.

The German automaker reiterated Tuesday that it’s committed tocooperating with regulators in California and elsewhere and said itwill present a reworked proposal to the EPA tomorrow at the meetingin Washington. California’s rejection related to initial planssubmitted last month, VW said. At that time it asked for anextension to submit additional information and data about thediesel engines and turbocharged-direct injection, or TDI.

“Since then, Volkswagen has had constructive discussions withCARB, including last week when we discussed a framework toremediate the TDI emissions issue,” VW said in an e-mailedstatement Tuesday.

CARB said it and the EPA will continue to evaluate VW’stechnical proposals.

Mueller’s flub

CEO Mueller had apologized Sunday in a speech on the eve of theNorth American International Auto Show in Detroit. “We know wedeeply disappointed our customers, the responsible governmentbodies and the general public here in the U.S.,” Mueller said. “Iapologize for what went wrong at Volkswagen.”

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That was the same night he made the controversial comments in aninterview with National Public Radio appearing to downplay thecompany’s role in actively deceiving regulators. On Monday morning,the company asked NPR for a do-over, where Mueller blamed a noisyatmosphere for his earlier comments and apologized again.

Mueller is scheduled to meet with EPA chief Gina McCarthy andmembers of Congress Wednesday morning in Washington. On Mondayevening, Mueller had dinner with Republican Senator Bob Corker ofTennessee. VW has a manufacturing plant in Chattanooga, which isundergoing a major expansion. Corker said VW views the meeting withEPA as “very important.”

U.S. meetings

“They understand fully the order of magnitude of mistakes thathave been made and my sense is they are very committed to resolvingthis in an appropriate way,” Corker said in an interview Tuesday,before ARB announced it had rejected VW’s recall plan.

The CEO’s appearance in Detroit and in the nation’s capital markhis first trip to the U.S. in his new role as CEO. Mueller, theformer head of VW’s Porsche sports-car unit, was named CEO inSeptember after Martin Winterkorn was forced out as the“dieselgate” scandal erupted.

Beyond developing an effective fix for each of the three typesof non-compliant 4-cylinder engines, VW must document any adverseimpacts on vehicles and consumers. And since the emissions scandalcenters on Volkswagen’s use of a sophisticated “defeat device” toskirt regulations, any proposed remedy — whether that’sretrofitting cars with new parts or revising software codes— will need to be tested by California technicians before theplan is rolled out to consumers.

Related: VW bad news drip continues two months after scandalstarted

Rebecca Lindland, a senior analyst at Kelley Blue Book, saidTuesday that the rejection was not a surprise.

“Volkswagen has been working on an additional potential fixinvolving the catalytic converter. Those details have not beenworked out. The reasons for the rejection involve needing moredetails and specifications," she said in a statement.

“Today’s actions do not preclude a recall, but allow for abroader array of potential remedies,” the board said in thestatement.

--With assistance from Jeff Plungis, Alan Katz and KevinWhitelaw.

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