The big news today in the car world is that the CEO of Volkswagen Martin Winterkorn, has resigned and denies any wrongdoing to do with the emissions deception scandal but will leave in “the interests of the company”. The scandal has caused Volkswagen to plunge into crisis after being caught out scamming the authorities with bogus emissions tests in the United States.

This could see Volkswagen fined a maximum of $18 billion (£11.6 billion) by regulators, and millions more if it is found that Volkswagen misled consumers who will be able to sue them.

For those of you who haven’t heard about this scandal until now, here’s the low-down:

What is Volkswagen accused of doing?

Volkswagen has been accused of falsifying emissions data on its vehicles in the US, pretending that their cars are cleaner than they really are. The US Environmental Protection Agency (E.P.A) has said that this was a deliberate attempt to evade rules on emissions.

Did Volkswagen do it?

Yes, Volkswagen AG have openly admitted it and company CEO Martin Winterkorn on Sunday issued a statement of apology promising an internal investigation. Furthermore, Volkswagen AG will halt the sale of cars in the US with engines involved in the scandal.

How did they do it?

Each car had special software installed on the ECU which knew when an emissions test was being carried out. This software would alter the flow of exhaust gases, reducing NOx emissions by 40 percent compared to under normal driving conditions. Volkswagen were caught following independent analysis by researchers at West Virginia University.

What is the true scope of the scandal?

The true scope of the Volkswagen emissions scandal is as such – regulators say that 482,000 diesel cars sold in the US between 2008 and 2015 have dodgy emissions results. Cars include the Audi A3, Volkswagen Passat, Volkswagen Golf, Volkswagen Jetta and Volkswagen Beetle.

What’s the damage?

Volkswagen AG lost almost a quarter of its market value immediately following its announcement admitting their involvement in falsifying emissions data. To put this into perspective, Volkswagen AG’s market value dropped by 15.6 billion euros and its stock is the lowest it has been in three years. On top of that, Volkswagen faces a crippling fine of $18 billion, and if it is found that they have also falsified tests in Europe, you can double that.

Are these allegations only confined to the US?

The scariest thing about this story for Volkswagen is the fact that the act of falsifying emissions data may not be confined to the US. They could have been doing this for over 8 years in the UK and Europe. And if that is found to be the case, then that $18 billion fine is going to look tiny in comparison to what the rest of the world has in store for them. We’d be incredibly surprised if regulators found no evidence of emissions tampering in the UK and across Europe. On the prospect of a UK scandal, RAC chief engineer David Bizley said:

“Motorists on this side of the pond will be looking for reassurances that vehicles sold in Britain – which are subject to stringent European emissions standards testing – are not affected by today’s Volkswagen announcement.”