Volkswagen set aside nearly $9 billion last year for costs to repair or buy back vehicles affected by the company's diesel emissions scandal.
The German automaker last week announced financial results from a tumultuous 2015. VW reported an operating loss of $4.7 billion, which factored in a charge of $18.6 billion to address the diesel emissions issue.
Roughly 11 million VW vehicles worldwide were equipped with software that manipulated their emissions levels during official testing. A recall in Europe — where most of the vehicles are located — is already underway, but repairs in the U.S., which must conform to stricter emissions limits, will be more complicated and expensive.
Under a settlement reached with U.S. authorities last month, VW will either repair or buy back more than 500,000 cars in the U.S.
The nearly $9 billion figure was the first indication of estimated costs for "pending technical modifications ... and repurchases." Another $8 billion was set aside for "legal risks worldwide" stemming from the scandal.
VW executives agreed to curb bonus payments in light of the scandal, and the company said last week that it would propose reducing its dividend at its annual meeting next month. Cutting the dividend, VW said, sends "a powerful signal that it has the strength to handle the current situation using its own resources."
“This will remain our most important task until the very last vehicle has been put in order,” CEO Matthias Mueller said in a statement.
VW said that despite the ongoing crisis, the company remains in strong position to realign its operations in the rapidly evolving auto industry. The automaker said that it hopes to create new partnerships and strategic investments, along with make electric vehicles one of its "new hallmarks."
Mueller, however, warned that the company would face a "very challenging year" in 2016.
"We are not letting the crisis slow us down, but are stepping on the gas — in all of our brands, and in all relevant markets," Mueller said.