So VW stock price gets slammed, losing 23% in one day of trading, most of it in the early morning today. It could be a very intersting buy opportunity for their stock price since every car manufacturer bounces back (look at GM, Toyota, and Honda).
Here's an interesting link with much information: VW's Emissions Cheating Found by Curious Clean-Air Group - Bloomberg Business
Clean Air Group tested the cars with West Virginia University, which then sent their findings to the EPA. Interestingly enough, the BMW X5 was also tested and passed.
Bosch manufactured the modules but claims no responsibility on how they are used by the manufacturer (VW).
VW purposefully misled the public, its customers and the regulatory bodies with their "Defeat software", and will face a hefty fine. As others mentioned earlier, the VW group benefited from a commercially unfair advantage, whether intended or not (although everything points to it being deliberately programmed, why else would it be there?).