VW faces an extra £2.3bn bill for diesel test scandal

DISGRACED car maker Volkswagen is facing another £2.3bn bill over its cheating of diesel emission tests.

The German group admitted the scandal’s cost was higher than expected as prosecutors in Munich arrested a former board member of Porsche, one of its car brands.

Wolfgang Hatz, who was detained on Thursday, is the first top VW executive to be detained in Germany.

Shares in VW fell 0.25pc, or €0.35 (£0.31), to €138 (£121.64) yesterday as it revealed its total bill for Dieselgate could rise to around £22bn.

Europe’s biggest auto manufacturer admitted in September 2015 that it had cheated American emissions tests using illegal software.

It had already set aside £19.9bn to pay for expected fines and vehicle refits, agreeing with US regulators to spend up to £11.4bn to buy back or fix some 475,000 cars.

But yesterday bosses said they expected the bill to rise by another £2.3bn because the process had proved more difficult than expected. A spokesman said: ‘We have to do more with the hardware.’

The company said fixes were running smoothly in Europe, where only a software update is required for 8.5m affected cars.

VW’s bigger bill comes after chief executive Matthias Mueller insisted earlier provisions would be enough to cover the scandal.

Stuart Pearson, an analyst at BNP Paribas, said: ‘ Investors will understandably worry what else may be next.’