Volkswagen has announced it set aside more than double provisions for the diesel emissions scandal to €16.2 billion.
In 2015, VW told shareholders that €6.7 billion had been set aside for potential costs or recalls.
The increased sum included the cost of fixing cars that violate air pollution standards, buying back vehicles and legal costs.
The move comes as German carmakers agreed to recall 630,000 diesel vehicles to tweak engine software.
German transport minister Alexander Dobrindt said Mercedes Benz, Opel and Porsche as well as VW and Audi would adjust settings that increased levels of emissions such as nitrogen dioxide in some diesel cars.
Shares in Daimler fell 4.6% in Frankfurt after the Mercedes owner said it had begun an internal investigation into its diesel emissions testing at the request of the US Justice Department.
Daimler said net profit for Q1 of 2016 fell by a third to €1.4 billion, held back by costs associated with the launch of the new E-Class range. The bigger-than-expected decline came despite a 2% rise in revenue to €35 billion as sales rose 7% to 683,885 vehicles.
VW CEO Matthias Muller said he could not put a figure on the total cost of the emissions scandal until a final deal was reached with US authorities.
Nor could the company release preliminary findings from an investigation it commissioned from law firm Jones Day until reaching an agreement, it said.
VW still faced the DoJ fines as part of an expected civil settlement, as well as possible criminal charges.
On April 21, a US court disclosed details of a deal between VW and the DoJ for more than 500,000 American owners of its diesel cars affected by the emissions cheating.
The deal will involve buybacks and “substantial” compensation for owners of mostly two-liter vehicles.
The increased emissions provision pushed VW to an annual pre-tax loss of €1.3 billion, compared with a profit of €14.7 billion the previous year.
VW expected group sales to fall by up to 5% in 2016.
Chief financial officer Frank Witter said: “We are again operating in an exceedingly challenging environment in which global demand for new vehicles is declining, exchange rates and interest rates remain highly volatile and competition in many of our markets is intensifying.”
VW shares closed down 1.7% in Frankfurt on April 22 and are more than 40% lower than at this time last year.
