Volkswagen now blames a small group of engineers unable to meet stiff U.S. regulations for its diesel-emissions cheating.
The company says a small group of engineers were responsible for the "defeat device" software that allowed diesel cars to cheat on U.S. emissions tests.
The software was created when engineers realized that the company's cars could not meet U.S. standards by legal means, Volkswagen claims.
These conclusions were drawn from an internal investigation involving 450 people--including both Volkswagen employees and independent analysts form law firm Jones Day.
VW says the analysts combed through 100 terabytes of data.
They concluded that diesel cheating was the result of a "chain of errors" that dates back to 2005, when Volkswagen decided to make a major push for diesel cars in the U.S.
2015 Volkswagen Passat TDI
However, engineers found that it would be impossible for the EA189 2.0-liter four-cylinder engine to meet U.S. emissions standards within the required timeframe and budget.
This led to the installation of the "defeat device" software in 482,000 2009 through 2015 model diesel cars in the U.S.
The software allowed cars to detect the conditions of a laboratory emissions test and alter performance to allow cars to pass.
But in real-world driving, emissions limits were ignored. Some models were found to emit up to 35 times the legal levels of nitrogen oxides (NOx) at times.
Even when effective ways to reduce NOx emissions were found, Volkswagen says they were "not employed to the full extent possible."
Instead, when VW began using an exhaust after-treatment additive called AdBlue in its cars, the "defeat device" software was used to increase the amounts used during emissions tests.
2015 Volkswagen Golf TDI
Volkswagen claims this was able to happen because the misconduct of certain individual employees was tolerated, or not identified in the first place.
The highly-specialized nature of software development means it is possible that only a handful of engineers knew about the "defeat device," or would have had the technical expertise to identify it," notes a Forbes analysis.
But those employees were still acting on strategic decisions made by upper-level management to sell more diesels, and under certain budget and time constraints.
In response to the findings, Volkswagen says it will tighten oversight procedures for software development and emissions testing.
2015 Volkswagen Jetta TDI, 2014 New York Auto Show
That includes external evaluation of emissions tests, company officials said.
But Volkswagen still hasn't announced a timeline for recall repairs of affected diesel cars in the U.S.
The company submitted a proposed fix to the U.S. Environmental Protection Agency and California Air Resources Board last month, but details haven't been made public.
Meanwhile, a fix for some cars sold in Europe--where emissions standards have been far less strict--has been approved, and recalls are expected to begin next month.