Analysts estimate that diesel scrappage in Germany could cost Volkswagen up to another EUR1.2 billion. Under the agreement, the company either has to buy back the affected cars or modify them to bring them into compliance with United States environmental laws.
"We have to do more with the hardware", a VW spokesman said, adding USA customers were having to wait longer for their cars to be repaired. The complications, which the company didn't specify in detail, amount to about 5,000 euros per auto.
"The size of the provision is surprisingly large, considering the numbers of cars involved isn't very large", said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler, as quoted by Bloomberg."It shows VW remains some distance from coming through the scandal". The scandal has also raised questions and sparked investigations into emissions cheating at numerous other automakers, and has all but ruined diesel's reputation in the passenger vehicle market around the world.
VW shares were down 1 percent at 137 euros as of 1400 BST.
Two years after the problems first emerged, Volkswagen is still struggling to put the crisis behind it.
"Four months later the US Justice Department said it had charged a former Audi manager with directing employees at the company to design software to cheat US emissions tests in thousands of Audi diesel cars".
The diesel cars in the US affected by scandal only represent a small part of the 11 million rigged cars globally. The fix is taking longer and some cars had to be worked on a couple of times.
Volkswagen said the extra provisions would be reflected in its third-quarter operating results, which are due to be published on October 27. Net liquidity was EUR23.7 billion at the end of June, down 17.5% from a year earlier.
He was in charge of Audi's engine development from 2001 to 2007 before taking over the role for the entire Volkswagen Group.
The move comes as the scandal set off a backlash that has led consumers to turn away from diesel technology amid concerns about pollution and driving bans.