Volkswagen to slash investment by $1.1bn per year

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Embattled German carmaker Volkswagen announced Tuesday it would cut annual investment by 1 billion euros ($1.1 billion) after a special board meeting in the wake of the emissions scandal that has thrown the company into crisis.

In a press release Tuesday, the company's new Volkswagen Brand Board of Management said they planned to ramp up efficiency programs and overhaul select car models while cutting investments by around 1 billion euros ($1.1 billion) per year.

The board also outlined plans for major developments towards plug-in hybrid vehicles and said new models of its flagship Phaeton car would be completely electric.

Volkswagen's new diesel vehicles, meanwhile, would only be equipped with the "best environmental technology," the press release explained.

It comes after Volkswagen's diesel models built between 2008 and 2015 were found to have been equipped with software that reduced emissions during regulatory testing, but emitted 10 to 40 times the legal amount while on the road.

Volkswagen could be on the hook for as much as $18 billion in fines in the U.S.. However, with details emerging of similar software being used in Europe and Asia, alongside plans to recall and refit existing models, that figure could balloon.

"Time and again, the Volkswagen team has proved it stands united and is fully focused on shaping the future, particularly when times are tough," CEO Herbert Diess said in the press release. "We have now laid the further foundations for that."

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