German prosecutors have widened their probe of Volkswagen's diesel emissions cheating scandal and are now investigating 17 employees, up from six employees previously, prosecutor Klaus Ziehe says.
"This is part of the diesel investigation, the number of suspects has risen, although none are from the management board," Ziehe said in Braunschweig, near VW's Wolfsburg headquarters.
Volkswagen Chief Executive Matthias Mueller on Tuesday told employees gathered at the Wolfsburg that the emissions scandal would inflict "substantial and painful" financial damage on the carmaker.
The scandal will keep VW busy "for a long time", the CEO said, adding that the carmaker has made no attempts to conceal its wrongdoings.
Volkswagen last year set aside 6.7 billion euros ($A9.87 billion) to cover costs of recalling of about 11 million diesel vehicles globally.
"We will this year probably every now and then be confronted with unpleasant news related to dieselgate," Stephan Weil, prime minister of Lower Saxony, on Tuesday told a gathering of workers at Volkswagen's main factory in Wolfsburg.
Europe's largest carmaker should be able to cope with the fallout of its manipulation, Weil said.
"The damage will, on balance, not be minor, as much as that can already be said today, but Volkswagen luckily has a strong economic substance," Weil told the gathering, attended by thousands of workers.
Lower Saxony, which holds 20 per cent of VW's common shares, has "no reason" to alter its commitment to the carmaker, Weil said.