A federal judge in the US has given Volkswagen and the country's regulators until April 21 to reach a settlement over the diesel emissions scandal covering about 600,000 of the German carmaker's vehicles.
At a court hearing in San Francisco District Judge Charles Breyer, together with lawyers for the Justice Department and VW, said progress was being made in intensive negotiations.
He said some issues remain and no settlement has been reached yet.
Mr Breyer said the remedy could involve fixing the 580,000 vehicles on US roads or buy backs and other options, but said he would not disclose any details of the ongoing talks.
If no deal is reached by April 21, Breyer said he would consider holding a trial on the issue this summer to address the vehicles that the US Environmental Protection Agency says emit up to 40 times legally allowable pollution in real world driving conditions.
The EPA alleges Volkswagen installed "defeat devices" in the cars which activated when lab equipment was being used to test the cars and reduced their emissions below what the vehicles would normally produce.