Volkswagen has apologised for breaking public trust after US regulators accused the car manufacturer of effectively lying about some of its cars' emissions.

Half a million cars were recalled on Friday after the Enivronmental Protection Agency (EPA) discovered that the so-called "defeat device" allowed the Audi A3, VW Jetta, Beetle, Golf and Passat diesel models to emit fewer emissions during testing than they normally would.

"I personally am deeply sorry that we have broken the trust of our customers and the public," said Volkswagen chief executive Martin Winterkorn.

He also said that he has launched an investigation into the "defeat device".

Volkswagen's shares are down nearly 20%. The scandal could cost the Germany company billions. Under EPA rules, VW could be fined $37,500 per vehicle that does not comply with federal clean air rules. Since 2008, Volkswagen has sold 482,000 vehicles that are included in the allegations - that would result in fines totaling more than $18 billion.