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The Volkswagen Group has confirmed it will set aside 6.5bn Euros (£4.7bn) to cover costs in the wake of the US car emission testing scandal.
The German company has also confirmed that 11 million vehicles worldwide, which use the Type EA 189 four-cylinder diesel engine, are affected by the scandal.
VW said the amount set aside "may be subject to reevaluation" following ongoing investigations.
"Volkswagen does not tolerate any kind of violation of laws whatsoever. It is and remains the top priority of the Board of Management to win back lost trust and to avert damage to our customers," the group said in a statement. "The Group will inform the public on the further progress of the investigations constantly and transparently."
This update comes after America's Environmental Protection Agency (EPA) discovered of a device that disguised pollution levels, helping vehicles to pass lab tests even though they actually emit up to 40 times the emission limit in the US.
The EPA found the device in diesel cars including the Audi A3, VW Jetta, Beetle, Golf and Passat models.
According to the EPA, the fine for each vehicle that does not comply with clean air rules could be up to $37,500 (£24,000), meaning that the total could reach $18bn.
Volkswagen has stopped selling the affected vehicles in America, and has ordered an independent investigation.
"Using a defeat device in cars to evade clean air standards is illegal and a threat to public health," said Cynthia Giles, assistant administrator for the Office of Enforcement and Compliance Assurance. "Working closely with the California Air Resources Board, EPA is committed to making sure that all automakers play by the same rules. EPA will continue to investigate these very serious matters."
Hagens Berman, an American law firm, is launching a class-action lawsuit against VW on behalf of people who bought the affected cars.
The US models cited by the law firm are the diesel versions of:
"While Volkswagen tells consumers that its diesel cars meet California emissions standards, vehicle owners are duped into paying for vehicles that do not meet this standard and unknowingly pay more for quality they never receive," the law firm alleged.
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