The scope of Volkswagen's emissions-cheating scandal is growing.

The German car maker on Tuesday admitted that 11 million of its diesel cars are equipped with sophisticated software used to cheat on U.S. emissions tests. The announcement comes after the Environmental Protection Agency on Friday first accused the carmaker of using the software to circumvent emissions testing for certain air pollutants.

It was initially thought that the problem affected 482,000 diesel passenger cars sold in the U.S. since 2008, but Volkswagen's internal investigation revealed it was much more widespread. The company said it's setting aside 6.5 billion euros, or about $7.3 billion, to cover the cost of recalls.

"Volkswagen does not tolerate any kind of violation of laws whatsoever," the company wrote. "It is and remains the top priority of the Board of Management to win back lost trust and to avert damage to our customers."

According to the EPA, VW's "sophisticated software algorithm" detects when the car is undergoing official emissions testing, and enables full emissions controls only during the test.

"The effectiveness of these vehicles' pollution emissions control devices is greatly reduced during all normal driving situations," the agency added.

So, the cars can meet emissions standards at the testing station, but during normal operation emit nitrogen oxides, or NOx, "at up to 40 times the standard," the EPA said. NOx pollution is especially risky for children, the elderly, and people with pre-existing respiratory diseases.

"NOx pollution contributes to nitrogen dioxide, ground-level ozone, and fine particulate matter," the agency said. "Exposure to these pollutants has been linked with a range of serious health effects, including increased asthma attacks and other respiratory illnesses that can be serious enough to send people to the hospital."

In its statement Tuesday, Volkswagen admitted that its internal investigation revealed a "noticeable deviation between bench test results and actual road use" in vehicles equipped with its Type EA 189 engines. Affected diesel models include the Jetta, Beetle, Golf, Passat, and Audi A3.