"Say something dirty" |
The firm said the problem, which it came across while investigating diesel emissions, could cost about €2 billion ($US 1.8 billion).
Brands including VW, Audi, Skoda and Seat could be affected, a VW spokesman told BBC News.
The issue mainly affects diesels, but could also include petrol models.
The problem lies in the way certain car types with "smaller engines" were certified to meet carbon dioxide emissions standards, the spokesman added.
CO2 is a greenhouse gas, as opposed to the NOx involved in earlier allegations, which is a pollutant that causes lung disease.
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