The source said the retrofit in the U.S. is likely to require separate solutions for three different versions of the WA 189 diesel engine sold over the seven years since it was introduced, and may also require hardware changes in addition to altering the software.
Volkswagen is trying to reassure German customers worried about the future of their diesel cars by telling them they can trade in their new diesel if it is banned from the road by cities trying to meet air pollution limits.
Volkswagen is rolling out its plan for re-selling most of the cars involved in the German automaker's diesel emissions cheating scandal.
German prosecutors are investigating whether VW executives delayed releasing information about manipulation of software to cheat on emissions tests.
Seven employees have also been charged with crimes in the U.S., but five are in Germany and are unlikely to be extradited.
Volkswagen has admitted to programming its diesel engines to activate pollution controls during government treadmill tests and turning them off for roadway driving.
Volkswagen and Audi brand vehicles with diesel engines make up the bulk of the vehicles caught up in Volkswagen's emissions cheating scandal.
The CEO of German automaker Volkswagen says the United States remains a "core market" for the company despite its diesel emissions scandal and has underlined that it hopes to expand there.
Chattanooga is one of several sites across the country, including the parking lot of the old Pontiac Silverdome outside Detroit, where the company is temporarily parking the vehicles until they can be fixed or recycled.
Prosecutors in Germany say they have sufficient evidence to indicate that former Volkswagen CEO Martin Winterkorn may have known of his company's emissions cheating software earlier than he claims.
Volkswagen is pleading guilty to three criminal charges and will pay $4.3 billion to the U.S. government for cheating on emissions tests and destroying evidence in an elaborate cover-up.
Volkswagen is launching a new company dedicated to car sharing and other "mobility services" in which people may need a ride but don't necessarily want to own the car.
The German company said the job cuts are part of a long-term plan to improve profitability and shift resources and investment to electric-powered vehicles and digital services.
Several angry Volkswagen owners told a federal judge on Tuesday that a $10 billion settlement does not adequately compensate them for the automaker's emissions cheating scandal.
Terms call for the German carmaker to spend up to $10 billion buying back or repairing Volkswagen and Audi 2-liter vehicles and paying owners another $5,100 to $10,000 each.
Loyal owners of Volkswagen diesel cars understandably felt betrayed when they learned the German automaker had rigged the testing process to bypass U.S. emissions standards. But many are having a change of heart after learning how much VW will pay them to turn in their cars.
The program affects nearly 500,000 tainted diesel vehicles on the road and another 12,000 that dealers are unable to sell, according to the report.
The National Labor Relations Board has declined to take up Volkswagen's challenge of a union vote at its lone U.S. assembly plant in Tennessee.
Institutional investors are suing automaker Volkswagen in a German court, seeking 3.25 billion euros ($3.57 billion) in damages over the company's diesel emissions scandal.
A Volkswagen whistleblower is now suing the German automaker, alleging he was fired after trying to stop the company from deleting evidence.
Volkswagen's top U.S. executive is stepping down amid the company's ongoing emissions cheating scandal. Volkswagen Group of America announced Wednesday that president and CEO Michael Horn is leaving "to pursue other opportunities effective immediately."
Automaker Volkswagen says it is recalling 680,000 vehicles with suspect air bag inflators in the United States. Volkswagen says it has notified the U.S. National Highway Traffic Safety Administration of the upcoming action involving VW vehicles from model years 2006 to 2014.
The rejection only applied to 2.0-liter diesel engines registered in California - 75,688 vehicles from model years 2009 to 2015, according to state officials.
VW Chairman Hans Dieter Poetsch said engineers in 2005 were unable to find a technical solution to U.S. nitrogen oxide emissions within their "timeframe and budget" and came up with the software that manipulated results.
Hans Dieter Poetsch said "our emissions testing will in future be verified by internal and external third parties and we are also introducing universal real life tests in on-road driving."
Volkswagen, which was already reeling from the fallout of cheating on U.S. emissions tests for nitrogen oxide in diesel vehicles, said in early November that an internal investigation had revealed "unexplained inconsistencies" in the carbon dioxide emissions from up to 800,000 vehicles.
At the hearing, lawyers made their pitches for bringing the cases to California, Tennessee, Louisiana, Florida, Massachusetts, Arizona, New York and New Jersey, among other places.
Sales of the Chattanooga-made VW Passat were down 60 percent from a year ago. Its sales fell as the company's newly redesigned 2016 Passat entered showrooms earlier this month.