Their problem is limited to diesel’s. It’s the massive $37k fine per car that is going to hurt. Not to mention recall expense and a big drop in gas mileage when the go legit.
Overall it’s pretty funny.
Bluster. The EPA was caught with its pants down (for 7 years): meaningless regulations that they cannot enforce. Some academic researchers (not the EPA or CARB) took the cars on real world driving tests and saw no difference on level highways with cruise control, just 10x higher NOX on hills. Then CARB picked up on it and forced some VW engineers to "admit" guilt. But read the statements from EPA, that is not an admission, it is some legal language (a verbatim quote of the law). What the engineers actually said was something else entirely.
Hence the 37k opening gambit. The EPA knows they have nothing.
You think it’s funny that a car manufacturer ran afoul of draconian laws by the thuggish EPA? Interesting.
That's how BMW and Mercedes-Benz does it with their US-market turbodiesel engines and how VW does it with the 3.0-liter V-6 TDI engine; VW will need to install SCR on all turbodiesel engines sold in the US market. (Indeed, one reason why Mazda delayed the SkyActiv-D engine to the US market was they couldn't make the engine meet US emission stardards without using SCR; Mazda is likely to introduce the SkyActiv-D engine on the CX-3 and CX-5 models with SCR installed.)