Volkswagen's US boss Michael Horn has admitted he knew about the company's emissions irregularities as far back as 2014.
In a statement presented to the US House of Representatives, Horn says he was first made aware of "a possible emissions non-compliance" in the Spring of 2014.
"I was informed that EPA [Environmental Protection Agency] regulations included various penalties for non-compliance with the emissions standards," he said, "and that the agencies can conduct engineering tests which could include “defeat device” testing or analysis. I was also informed that the company engineers would work with the agencies to resolve the issue."
Horn says he was told later on in 2014 that a technical fix for the defeat device had been identified to "bring the vehicles into compliance", and that engineers "were engaged with the agencies about the process."
The statement also confirms that it wasn't until September of this year that Volkswagen made the EPA aware of the defeat device, thus sparking the current scandal.
In his statement, Horn says the defeat device "could recognise whether a vehicle was being operated in a test laboratory or on the road. The software made those emit higher levels of nitrogen oxides when the vehicles were driven in actual road use than during laboratory testing."
Horn also said the events of the scandal had been "deeply troubling" and he "did not think that something like this was possible at the Volkswagen Group. We have broken the trust of our customers, dealerships, and employees, as well as the public and regulators.
"Let me be clear, we at Volkswagen take full responsibility for our actions and we are working with all relevant authorities in a cooperative way."
Describing the steps the company is now taking to remedy the situation, Horn promised that "responsible parties will be identified and held accountable," and that technical teams were working "tirelessly" to find a solution.
US hearing - Michael Horn speaks to the US House of Representatives
Speaking to the House of Representatives, Horn said: "we will rebuild the reputation of a company that two million people depend on for their livelihoods."
When asked directly whether Volkswagen installed defeat devices in its vehicles with the express purpose of defeating emissions controls, Horn replied "yes."
Horn also confirmed that around 325,000 vehicles in the US have the first generation of the affected diesel engine, for which a software-only fix won't be possible. For those cars, Volkswagen is exploring adding a Selective Catalytic Reduction (SCR) system to reduce emissions.
A further 9000 affected cars in the US have the second generation of the affected engine, and will be capable of being fixed with a software update. "We know we can fix these vehicles to meet emissions standards," said Horn.
Horn said that while the fix would remedy emissions, customers shouldn't expect gains or losses in terms of real-world fuel economy. He confirmed that there may be a small impact on the top speed of the affected cars, but that any impact on performance would be compensated.