Volkswagen added provisions of around 2.5 billion euros ($3 billion) on Friday to the mounting total from its diesel emissions scandal, which has already cost the company around 20 billion euros.
"The reason is an increase in provisions relating to the buyback/retrofit program for 2.0l TDI vehicles, which is part of the settlements in North America that is proving to be far more technically complex and time consuming," it said in a statement.
Its shares dropped after the statement and were down 3.1 percent by 0757 GMT, at the bottom of the German blue-chip DAX index, which was up 0.2 percent.
Volkswagen has recalled around 11 million vehicles worldwide since admitting two years ago to manipulating emissions tests in the United States. About 8.5 million of those are in Europe.
"You have to ask if this is a bottomless pit," said one Frankfurt-based trader.