BERLIN — Volkswagen said Tuesday that it would revamp the technology it uses for controlling diesel exhaust in future models as it struggles to overcome an emissions cheating scandal that has battered its reputation and threatened its financial stability.

The company said it would switch to what it called a selective catalytic reduction system to decrease emissions on its diesel engines in Europe and North America, where the scandal erupted last month.

The approach is conceptually similar to an emissions system Volkswagen considered until 2007, when it adopted the system now at the center of its scandal. The alternative technology, which is not part of its plan to fix cars already in circulation, was rejected by the company at the time as too costly.


Reflecting the scandal’s mounting financial toll, Volkswagen also said Tuesday that it would cut investments at its leading brand by 1 billion euros ($1.14 billion). That will limit the company’s ability to innovate at a time when carmakers are trying to keep ahead of a rush of new technology.

Volkswagen, Europe’s leading automaker, was forced to admit that about 11 million of its diesel cars worldwide were equipped with software that allowed it to cheat on tests of noxious gas emissions. The company now faces a raft of investigations in the United States, Europe, and China.

The change involves adding a tank of a urea-based fluid to clean exhaust and affects only coming models, said Volkswagen spokesman Peter Thul.

“Diesel vehicles will only be equipped with exhaust emissions systems that use the best environmental technology,” Herbert Diess, chairman of the car brand, based in Wolfsburg, Germany, said in a statement Tuesday. The change will take place “as soon as possible,” according to the statement.

It also appears Volkswagen will be moving away from diesel as its preferred clean technology. Volkswagen said Tuesday it was pushing ahead with the development of electric and plug-in hybrid cars based on a series of components that can be used in different models.


Exemplifying this shift will be a transformation of the next generation of Volkswagen’s luxury Phaeton limousine into an all-electric model, expected in 2019 or 2020.

Last week, Volkswagen submitted a detailed proposal to German authorities of how it planned to remove from its vehicles in the country the software used to cheat emissions tests. The Federal Motor Transport Authority is reviewing Volkswagen’s proposal to remedy the issue on its 1.2-, 1.6-, and 2-liter diesel engines.

The German Transport Ministry has said there will be a recall for affected vehicles, with a software fix for the 2-liter engines expected to be ready early next year. The 1.6-liter motors, however, would require further modifications that cannot be expected before later in 2016. No information has been released regarding a fix for the 1.2-liter engines.

In testimony before Congress last week and the British Parliament Monday, Volkswagen officials indicated that fixes would vary by country, given varying emissions standards.

Paul Willis, general manager of the Volkswagen Group in Britain, said Monday that repairs for diesels sold in Europe would not involve the installation of a new emission filtration system using urea as an additive. But such a remedy is expected in many vehicles in the United States, which has tougher standards for emissions of nitrogen oxides, which have been linked to a host of respiratory and cardiovascular illnesses.


Fallout from the scandal has ricocheted throughout Germany, Europe’s largest economy, with a benchmark survey released Tuesday showing economic sentiment dropped more than expected in October.