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Volkswagen Shares Plunge as Emissions Scandal Spreads

Shares in Volkswagen AG VLKAY -5.59 % plunged on Wednesday after the German car maker said its emissions-testing scandal had widened beyond what was previously disclosed, now encompassing a broader set of infractions that could affect about 800,000 more cars and cost it at least an extra $2 billion.

The company said on Tuesday that it understated the level of carbon-dioxide emissions of the additional cars when providing information to regulators. Some of these cars were gasoline-powered, Volkswagen said, moving the violations beyond the company’s diesel fleet for the first time.

Volkswagen disclosed the error after conducting its own emissions tests. The report is a fresh blow after VW’s admission in September that up to 11 million diesel-powered vehicles world-wide could have so-called defeat devices that lowered tailpipe emissions of nitrogen oxides during laboratory testing.

Volkswagen initiated an internal investigation after saying that some diesel-powered cars of model years between 2009 and 2015 used software that let them reduce nitrogen-oxide emissions during tests. U.S. and European authorities have begun regulatory and criminal investigations.

Tuesday’s disclosure is the first to involve the greenhouse gas carbon dioxide, which has been a focus of both European and U.S. authorities over the past decade.

Since the first disclosures in September, VW has reshuffled top management and suspended senior executives in charge of engine development. The new team is scrutinizing the company’s entire fleet of automobiles.

The Wolfsburg, Germany-based company’s supervisory board said it was “deeply concerned” about the revelation VW misstated carbon-dioxide emissions in addition to cheating on nitrogen-oxide tests. The board said it intended to meet soon “to consult on further...