Volkswagen has admitted to cheating on U.S. air pollution tests for years, causing shares of the company to fall by 23 percent Monday and prompting the company's CEO Martin Winterkorn to apologize.

Volkswagen has halted sales of the models involved in the scandal as regulators investigate. The world's biggest carmaker said they are cooperating with the external probe and will also conduct an internal investigation of their own, Bloomberg reports.

Winterkorn said he is "deeply sorry" for breaking the public's trust and promised that Volkswagen would do "everything necessary in order to reverse the damage this has caused."

The charges against Volkswagen could lead to some management changes within the company, Arndt Ellinghorst, a London-based analyst for Evercore ISI, noted.

The European Commission is also said to be taking Volkswagen's cheating very seriously. They are in contact with U.S. officials to find more details on the case.

The cheating scandal is related to Volkswagen's diesel vehicles, which were part of efforts by Winterkorn to become more competitive in the U.S. market. Nearly half a million vehicles are affected, and the scandal could result in up to $18 billion in fines.

"If this ends up having been structural fraud, the top management in Wolfsburg may have to bear the consequences," said Sascha Gommel, a Frankfurt-based analyst for Commerzbank AG, whose share rating is under review.

Volkswagen said its diesel vehicles were equipped with software that turns on full pollution controls only when the vehicle is going through emissions testing, the Environmental Protection Agency said Friday.

The scandal is leading top analysts to cut their recommendations for investing in Volkswagen and to reduce their price targets for shares of the stock.

The diesel cars were said to pollute 10 to 40 times the legal limit when the software was disabled, the EPA said.

The EPA said the "defeat device" that contributes to the pollution was found in almost half a million diesel cars made by Volkswagen, including the Audi A3 and the Volkswagen Jetta, Beetle, Golf and Passat models, BBC reports.