Volkswagen CEO Matthias Mueller.

Even as he continues to apologize for the diesel emissions scandal embroiling his company, Volkswagen CEO Matthias Mueller has touched off another firestorm with comments he made this week in Detroit, insisting that the maker “didn’t lie.”

Mueller’s comments, made to NPR at the North American International Auto Show in Detroit, came the same day regulators in California rejected the fix Volkswagen had proposed for close to 500,000 diesel vehicles equipped with a so-called “defeat device” designed to help it illegally pass U.S. emissions tests.

“We had not the right interpretation of American law,” Mueller said in an interview with the network. “We didn’t lie. We didn’t understand the question first. And then we worked since 2014 to solve the problem. And we did it together and it was a default of VW that it needed such a long time.”

The executive’s comments have touched off a firestorm, skeptics wondering how a manufacturer like VW wouldn’t have known the precise language and intent of the U.S. Clean Air Act and supporting rules set in place by the Environmental Protection Agency.

They note that the surreptitious software VW installed in its diesel engine controllers knew precisely how to tell when a vehicle was being tested, only then taking steps to make the engine’s emissions compliant. Otherwise, the vehicles would produce up to 40 times more oxides of nitrogen than allowed by law.

The loss of diesel models, like the Golf TDI, had a particularly harsh impact on VW sales in the U.S.

(Reality setting in for VW, and it doesn’t look good. Click Here for the story.)

It’s the latest in a series of questionable statements by VW. The maker has taken heat for insisting, on several occasions, that only a handful of engineers were behind the cheating effort. That seems hard to reconcile with the fact that more than 40 insiders have already come clean about their involvement under an internal corporate amnesty program.

VW’s credibility isn’t the only thing in doubt, though. Regulators with the EPA and the California Air Resources Board separately say they have rejected the fix VW has proposed to deal with the diesel emissions problem. CARB officials want on to issue a notice of 13 separate violations.

“The proposed plans contain gaps and lack sufficient detail,” said a statement from CARB. “The descriptions of proposed repairs lack enough information for a technical evaluation; and the proposals do not adequately address overall impacts on vehicle performance, emissions and safety.”

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An EPA statement said that the agency, “agrees with CARB that Volkswagen has not submitted an approvable recall plan to bring the vehicles into compliance and reduce pollution. EPA has conveyed this to the company previously.”

For its part, Volkswagen said it has had “constructive dialogue” with regulators, and is “committed” to resolving the problem. It also said that the latest actions “do not preclude a recall, but allow for a broader array of potential remedies.”

What’s clear is that there’s not an impasse. After leaving Detroit, Mueller headed to Washington for a face-to-face meeting with EPA Administrator Gina McCarthy.

“We appreciated the conversation with Volkswagen. We will continue to work toward a solution,” a spokesperson for the EPA said Wednesday.

VW was set to begin repairing diesel vehicles sold outside the U.S. this month, a process the company said could extend through the end of 2016. A total of 11 million vehicles were equipped with the defeat device, including 482,000 sold here.

The carmaker has come under increasing pressure to move on the problem in the States, the Justice Department filing a civil lawsuit against VW that potentially subjects it to more than $18 billion in fines – though most experts anticipate that fine would be reduced substantially if VW cooperates and moves quickly.

Saying the rejection by CARB and the EPA comes as no surprise, Kelley Blue Book analyst Rebecca Lindland said, “This is not a major setback. If they present them with another plan and that’s rejected, we can start to see some real concern. However, it’s unfortunate because it continues to delay getting consumers the answers and solutions they want, need and deserve.”

(Audi shoots for the moon in its Detroit press conference. Click Here to see why.)

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