Volkswagen (VW) will likely have to buy back or replace about 115,000 of its diesel vehicles equipped with emission cheating technology in the US, approximately one fifth of all affected cars in America.
The information was revealed by German newspaper Sueddeutsche Zeitung without citing any sources.
Allegedly, VW's options are to either refund the customers or offer them a new car at a significantly lower price. The rest of the 500,000 cars operated in the US will likely need costly adjustments to the exhaust system, which will have to be rebuilt and approved.
VW did not respond to the newspaper’s allegations.
Earlier this week, the US Justice Department filed a civil lawsuit against VW for violating the Clean Air Act, which may result in the car-maker having to pay a fine of up to $37,500 (£26,000) per affected vehicle.
On Tuesday, VW brand chief Herbert Diess told Reuters that he hoped the car-maker would reach an agreement with US regulators on how to bring the affected cars into compliance with legally binding emission limits.
He said that fixing newer models would be simpler than older cars equipped 2.0-litre diesel engines. Previously, some regulators suggested that these older models would have to be bought back. Diess did not confirm the speculations.
According to the US Environmental Protection Agency, which revealed the scandal in September 2015, an acceptable solution to the problem has not yet been found.
The Sueddeutsche Zeitung also reported that about 50 VW employees - including several division heads - had come forward as part of an internal amnesty programme to help the company clear up the scandal.
VW has admitted it installed software in certain diesel models that allowed the cars to pass government emissions tests while actually emitting 40 times the permitted amounts of nitrogen oxide in real-world driving.
Diess said that by the end of 2016, VW expected to be able to repair about 8.5 million diesel cars sold in Europe that did not comply with emissions standards.