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Matthias Mueller, CEO of Volkswagen, attends a press conference of the German car manufacturer Volkswagen in Wolfsburg, Germany, Thursday, Dec. 10, 2015. (AP Photo/Michael Sohn)

(Bloomberg) — Volkswagen AG’s work to overcome the emissions-cheating scandal was set back after the California Air Resources Board rejected its proposed engine fix as “incomplete,” just a day before Chief Executive Officer Matthias Mueller meets regulators to discuss ways out of the crisis. “Volkswagen made a decision to cheat on emissions tests and then tried to cover it up,” Mary Nichols, chairwoman of the state board, said Tuesday in an e-mailed statement. “They need to make it right”

The rejection closely followed a bumble by Mueller, who in a Sunday interview appeared to dismiss the crisis by saying Europe’s largest automaker “didn’t lie” to regulators about what amounts to a “technical problem.” The timing couldn’t be worse: VW also is in the midst of complex technical talks with the California board counterparts at the U.S. Environmental Protection Agency about possible fixes for about 480,000 diesel cars with 2-liter engines. 

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